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Key currencies wobble as investors await important releases

currency-newsKey currencies wobble as investors await important releases
The pound, euro and US dollar all wavered yesterday as markets waited for higher-impact data later in the week.

The pound is gaining ground this morning, with GBP/EUR fast approaching €1.19 and GBP/USD reaching $1.2445. GBP/CAD has risen to C$1.5947, while GBP/AUD and GBP/NZD have surged to AU$1.7729 and NZ$1.9593, respectively.

This morning, an unexpected fall in the UK unemployment rate is boosting Sterling. Looking ahead, a forecast rise in US retail sales could support the US dollar.

What’s been happening?

The risk-sensitive pound initially slipped yesterday as overnight risk aversion spread to European markets following China’s worrying economic data.

However, Sterling was able to recover in the afternoon. A more amenable tone from Boris Johnson regarding the Northern Ireland protocol helped to ease GBP investors’ fears. In addition, a recovering market mood supported the pound.

The euro, meanwhile, initially firmed until the eurozone posted some troubling trade data. The bloc’s trade deficit widened in March, missing market expectations of a return to a surplus, as soaring energy costs saw imports hit a record high.

The US dollar was also mixed, trading on risk sentiment amid a lack of market-moving data.

What’s coming up?

This morning, the UK unemployment rate fell from 3.8% to 3.7%, beating forecasts and boosting the pound. Sterling could continue to strengthen throughout the morning.

The latest first-quarter estimates for eurozone employment change and GDP growth could impact EUR. In particular, a downward revision to GDP could hurt the single currency.

Otherwise, headlines from the Ukraine crisis may drive movement in the euro.

USD investors will be eagerly awaiting April’s retail sales results. If sales grew by 0.9%, as expected, then the US dollar could climb.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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