The euro slumped on Thursday following the European Central Bank’s (ECB) latest interest rate decision.
Sterling remains flat this morning as well, with GBP/EUR muted at €1.1585, GBP/USD stable at $1.2909 and GBP/CAD subdued at C$1.7408, while GBP/AUD and GBP/NZD hold steady at AU$1.8380 and NZ$1.9427 respectively.
In the spotlight today will be the publication of the latest US GDP figures, where expectations of a slight slowdown in growth may limit the appeal of the US dollar later this afternoon.
What’s been happening?
The pound was rangebound throughout yesterday’s session, with investors seemingly reluctant to purchase the currency in the face of ongoing uncertainty over Brexit.
Further limiting the appeal of Sterling was growing speculation over the future of Theresa May’s premiership as Conservatives backbenchers continue to push for the PM to step down.
This offset the publication of the Confederation of British Industry’s latest distributive trends index, which indicated that UK retail activity accelerated in April.
Helping to limit the movement in the GBP/EUR exchange rate on Thursday were comments from the European Central Bank’s Luis de Guindos, with the euro seeing limited demand after he suggested the bank could potentially resume its bond-buying programme in an effort to boost inflation.
Meanwhile, the GBP/USD exchange rate briefly touched a new two-month low on Thursday before paring its losses by the end of the session due to a modest pullback in the US dollar after initial jobless claims were reported to have surged more than expected last week.
What’s coming up?
Looking ahead, centre-stage today will be a preliminary reading of US GDP in the first quarter of 2019.
This may rob the US dollar of some of its recent momentum, as economists predict growth slowed modestly from 2.2% to 2.0% in the three months leading to March.
In the meantime, the pound may struggle this morning with the publication of the latest UK mortgage figures as analysts forecast mortgage approvals will have weakened in March.
Finally, in the absence of any notable Eurozone data, the euro may find itself left adrift at the end of this week’s session, as EUR investors look to next week and the publication of the Eurozone’s own GDP figures.
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)