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Pound firms on EU single market hopes – UK to seek closer regulatory alignment
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US dollar wobbles amid peace setback – US-Iran talks collapse
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Euro steady following Hungarian election – New leader to seek to work more closely with the EU
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Middle East to remain in the spotlight – Reports suggest a second round of peace talks is being considered
Pound (GBP) buoyed by EU alignment optimism
The pound (GBP) trended higher against most of its peers yesterday, supported by the prospect of closer UK alignment with the EU’s single market.
Proposed legislation would see the UK adopt new EU regulations without requiring a full parliamentary vote each time, with GBP investors hoping this will help ease friction with the UK’s closest trading partner.
GBP investors will look to comments from Bank of England (BoE) Governor Andrew Bailey for fresh impetus today, with Sterling potentially faltering if he pushes back on the more aggressive bets for UK interest rates this year.
Euro (EUR) stable as EU officials welcome Hungarian election result
The euro (EUR) was steady on Monday, amid cautious optimism in the EU following Victor Orban’s loss in Hungary’s general election.
Orban’s successor, Péter Magyar, has already signalled he will forge a closer relationship with the EU and end Hungary's endless obstruction of key EU decisions.
In the absence of any notable Eurozone economic releases, movement in the euro is likely to be dictated by wider market movements today.
US dollar (USD) fluctuates on Middle East uncertainty
The US dollar (USD) initially rose yesterday amid a flight to safety after US-Iran peace talks broke down over the weekend.
However, safe-haven demand subsequently waned as US President Donald Trump claimed Iran ‘wants to work a deal’, keeping hopes alive for a diplomatic solution to the crisis.
The USD selling bias remains in place so far this morning, amid reports that the US and Iran are considering a second round of negotiations.
Canadian dollar (CAD) firms as oil prices rise
The Canadian dollar (CAD) ticked higher on Monday, as global oil prices briefly rebounded above $100 a barrel.
Turning to today’s session, hopes for a second round of peace talks are likely to suppress oil prices today, limiting demand for the ‘loonie’.
Australian dollar (AUD) slides amid slump in morale
The Australian dollar (AUD) came under pressure in overnight trade in response to a much larger-than-expected deterioration in domestic consumer and business confidence since the start of the war in the Middle East.
New Zealand dollar (NZD) buoyed by risk-on flows
The New Zealand dollar (NZD) trended higher in overnight trade, as it benefited from an uptick in market risk appetite.
Data Releases
13:30 USD PPI (Mar)
17:00 GBP BoE Bailey Speech
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