Pound (GBP) rudderless in absence of data
The pound (GBP) was mixed yesterday, as a lack of UK economic data left the currency adrift.
As a result, Sterling traded in a wide range against its peers.
Turning to today, UK data remains absent from the calendar. As a result, Sterling could trade without a clear directional bias once again.
Euro (EUR) underpinned by ECB bets
The euro (EUR) firmed yesterday, with the single currency being buoyed by European Central Bank (ECB) interest rate hike bets.
The ECB’s latest Financial Stability Review indicated that inflationary pressures are likely to lead to tighter monetary policy, reinforcing expectations that the bank will raise rates at least twice over the next year.
A further deterioration in Eurozone economic sentiment in May could pressure EUR today. However, any losses in the common currency may be limited if we see hawkish signals from ECB President Christine Lagarde or the bank’s latest policy meeting minutes.
US dollar (USD) buoyed by Middle East uncertainty
The safe-haven US dollar (USD) edged higher yesterday as geopolitical uncertainty supported the currency.
US-Iran tensions then flared up overnight, with both sides trading strikes and US President Donald Trump warning he may have to ‘finish the job’. With risk aversion gripping markets, the ‘greenback’ firmed.
Today the focus falls on the latest core PCE price index – the Federal Reserve’s preferred measure of inflation. Rising price pressures could reinforce Federal Reserve interest rate hike bets, thereby supporting USD.
Canadian dollar (CAD) wobbles as oil prices waver
The commodity-sensitive Canadian dollar (CAD) initially stumbled yesterday as oil prices dropped amid hopes for a US-Iran peace deal. However, CAD has since recouped those losses as fresh fighting in the Middle East saw oil tick higher.
Shifts in the price of crude and events in the Middle East are likely to continue impacting the ‘loonie’ today, potentially leading to volatility.
Australian dollar (AUD) dips amid risk-off mood
The Australian dollar (AUD) weakened overnight as renewed tensions in the Middle East soured market sentiment.
New Zealand dollar (NZD) retreats as sentiment sours
The New Zealand dollar (NZD) initially rose to new multi-day highs overnight before retreating as risk aversion set in.
Never miss a movement. Create a free account with Currencies Direct to get the latest currency news delivered straight to your inbox. You can also set up rate alerts and check live rates 24/7.
