Pound (GBP) sidelined by dovish BoE remarks
The pound (GBP) struggled to attract support at the end of last week, following dovish comments from Bank of England (BoE) policymaker Alan Taylor.
Speaking to the Financial Times, Taylor dismissed the recent spike in inflation and voiced his support for the bank to accelerate the pace of its monetary easing.
Coming up, the UK’s latest manufacturing PMI may act as a headwind for Sterling at the start of this week as May’s finalised figures are expected to report a sharp contraction in factory sector growth.
Euro (EUR) pressured by USD resurgence
The euro (EUR) trended broadly higher through the first half of Friday’s session, supported by a stronger-than-expected German inflation print.
The single currency then stumbled towards the end of the session as it was undermined by its negative correlation with the resurgent US dollar (USD).
Today also sees the publication of the Eurozone’s own manufacturing PMI, with the euro potentially strengthening if factory sector activity improved in line with expectations.
US dollar (USD) climbs amid US-China trade deal fears
The US dollar was initially subdued on Friday after an expected drop in the Federal Reserve’s preferred indicator for inflation, the core PCE price index.
However, USD demand then rebounded following comments from US President Donald Trump in which he accused China of violating the tariff truce agreed between the two powers a couple of weeks ago.
The latest ISM manufacturing PMI will be the primary focus today, with the US dollar potentially facing fresh pressure if US factory activity continued to contract last month.
Canadian dollar (CAD) buoyed by upbeat GDP release
The Canadian dollar (CAD) closed last week’s session on a positive note, after Canada’s first-quarter GDP figures outpaced expectations.
Looking ahead, the ‘loonie’ may struggle to sustain these gains if the recent slump in oil prices persists into this week.
Australian dollar (AUD) supported by USD weakness
The Australian dollar (AUD) trended higher during today’s Asian trading session, with a pullback in the US dollar following Trump’s new steel and aluminium tariffs making the ‘Aussie’ more appealing to investors.
New Zealand dollar (NZD) buoyed by risk-on flows
The New Zealand dollar (NZD) also appreciated in overnight trade as the slide in the US dollar bolstered market risk appetite.
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