Pound (GBP) dented by trade deal disappointment
The pound (GBP) initially struggled to attract support on Wednesday as it became evident that the UK had not managed to secure a deal with the US to spare it from US President Donald Trump’s tariff agenda.
However, Sterling strengthened following Trump’s tariff announcement as it became clear that the UK got off ‘lightly’ with only a 10% tariff.
Turning to today’s session, Sterling sentiment may be able to draw some support from the UK’s latest services PMI, if March’s finalised figures confirm activity improved sharply.
Euro (EUR) mixed amid trade war fears
Trade in the euro (EUR) was a little erratic on Wednesday, amid concerns that the EU’s retaliation to Trump’s tariffs could spark an EU-US trade war.
While transatlantic trade tensions weighed on the single currency, a pullback in the US dollar (USD) helped buoy EUR exchange rates.
The European Central Bank (ECB) will publish the minutes from its latest policy meeting later today. If they signal that a growing number of policymakers believe Eurozone interest rates are at or close to their neutral level, the euro may strengthen.
US dollar (USD) pressured by recession fears
The US dollar faced headwinds yesterday as Trump’s ‘Liberation Day’ tariff announcement went down poorly with USD investors.
USD sentiment slumped as analysts warned that the sweeping tariffs will upend global trade and increase the risk of the US economy slipping into a recession .
Coming up, the ‘greenback’ may face headwinds later today if the latest ISM services PMI reports a slowing of US service sector activity last month.
Canadian dollar (CAD) soars on tariff relief
The Canadian dollar (CAD) shot higher Wednesday as CAD investors expressed relief that Trump’s tariff announcement didn’t include any additional measures targeting Canada.
Canada’s latest trade figures might trigger some volatility in the ‘loonie’ later today, as CAD investors seek to gauge how Trump’s initial tariff threats against Canada may have impacted trade dynamics.
Australian dollar (AUD) slides as China hit by further tariffs
The Australian dollar (AUD) trended broadly lower overnight on Wednesday as the currency’s status as a proxy for China saw it pressured by Trump’s move to impose even higher tariffs on goods imported from China.
New Zealand dollar (NZD) undermined by risk-off flows
The New Zealand dollar (NZD) also weakened in overnight trade amid a risk-averse market mood.
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