Pound (GBP) uncertain in wake of jobs report
The pound (GBP) faced volatility yesterday following a mixed jobs report. Although unemployment unexpectedly declined, there were still signs of weakness in the labour market.
Political jitters added to the choppy movement. The ongoing scandal around the appointment of Peter Mandelson as US ambassador continued to dominate UK headlines.
Today, the pound is so far unfazed by the UK’s latest consumer price index, which has had little impact on Bank of England (BoE) interest rate expectations. While headline inflation rose from 3% to 3.3% in March, as forecast, core inflation edged down from 3.2% to 3.1%.
Euro (EUR) dragged down by German data
The euro (EUR) slipped yesterday as troubling German data weighed heavily on the common currency.
Germany’s ZEW economic sentiment index fell to -17.2 in April, its worst reading since December 2022 and well below forecasts that it would only drop to -5.
Looking ahead, the Eurozone’s consumer confidence index for April is scheduled for release this afternoon. Another deterioration in morale could sap demand for EUR.
US dollar (USD) buoyed by Middle East uncertainty
The US dollar (USD) wavered higher yesterday as uncertainty around the US-Iran ceasefire and upcoming peace talks provided USD with safe-haven support.
A slight improvement in risk appetite through the session contributed to some choppy movement in the ‘greenback’. However, strong US retail sales in March helped keep the currency afloat.
With US data thin on the ground today, the ‘greenback’ could trade primarily on market risk appetite. Ongoing geopolitical uncertainty could see USD waver.
Canadian dollar (CAD) supported by oil prices
The crude-linked Canadian dollar (CAD) ticked higher against its weaker rivals yesterday as a slight rise in oil prices bolstered the ‘loonie’.
Oil price movements could continue to drive CAD today amid a lack of Canadian economic data. Events in the Middle East could lead to crude volatility.
Australian dollar (AUD) supported by relief in markets
The risk-sensitive Australian dollar (AUD) edged slightly higher overnight as news that US President Donald Trump was unilaterally extending the US-Iran ceasefire brought some relief to markets.
New Zealand dollar (NZD) firms amid risk-positive trade
The New Zealand dollar (NZD) also ticked higher last night thanks to a risk-on market mood.
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