Pound (GBP) flat amid rise in UK bond yields
The pound (GBP) was mostly rangebound yesterday, as uncertainty over the US-Iran ceasefire sparked a fresh uptick in UK gilt yields.
While yields remained well below the highs struck in late March, the rise was enough to raise concerns over the cost to the UK government if it needs to step in to provide more energy support later in the year.
UK economic data is in short supply today, likely leaving movement in the pound to be dictated by wider market trends.
Euro (EUR) gains capped by uneven German data
The euro (EUR) was buoyed on Thursday, drawing support from its negative correlation with the US dollar (USD).
However, these gains proved modest, following mixed German data, which reported a rebound in exports but a surprise contraction in industrial production.
EUR investors will look to a speech by European Central Bank (ECB) Vice-President Luis de Guindos for fresh impetus today. If he strikes a hawkish tone, the euro may end the week on a positive note.
US dollar (USD) dented by GDP revision
The US dollar trended broadly lower yesterday, undermined by finalised GDP figures that revised US economic growth down to just 0.5% in the last quarter of 2025.
However, the downside in USD remained limited, with concerns over the ‘fragile’ US-Iran ceasefire leading many investors to retain their positions in the safe-haven currency.
Turning to today’s session, the focus may turn to the latest US consumer price index, with a sharp rise in inflation last month potentially lifting the US dollar if it sparks a hawkish repricing of Federal Reserve interest rate expectations.
Canadian dollar (CAD) buoyed by rebounding oil prices
The Canadian dollar (CAD) ticked higher on Thursday, bolstered by an uptick in oil prices resulting from renewed tensions in the Middle East.
Canada’s latest labour figures will be in the spotlight for CAD investors today, with the ‘loonie’ likely to face pressure if unemployment continued to tick higher in March.
Australian dollar (AUD) pressured by ceasefire doubts
The Australian dollar (AUD) retreated overnight on Thursday, as fresh doubts about whether the US-Iran ceasefire will hold led investors to shy away from risk-sensitive assets.
New Zealand dollar (NZD) slips as factory sector slows
The New Zealand dollar (NZD) also weakened in overnight trade, buffeted by the risk-off mood, as well as a drop in New Zealand’s latest manufacturing PMI.
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