US dollar pressured by mounting US trade concerns

Pound (GBP) pressured by cooling inflation

The pound (GBP) trended broadly lower on Wednesday as it was undermined by weaker-than-expected domestic inflation.

The UK’s consumer price index reported headline inflation slowed from 2.8% to a three-month low of 2.6% in March, all but confirming to GBP investors that the Bank of England (BoE) will cut interest rates in May.

With the UK having exhausted its data for the week, the pound will take its cues from wider market trends today.

Euro (EUR) underpinned by USD weakness

The euro (EUR) maintained a positive trajectory through yesterday’s session, as the single currency was underpinned by its negative correlation with the US dollar (USD).

However, the European Central Bank’s (ECB) impending interest rate decision capped the euro’s upside potential as EUR investors were reluctant to make any aggressive bets.

With a widely expected rate cut from the ECB already priced in, movement in the euro today is likely to be dictated by the bank’s forward guidance. A dovish outlook from the bank could sink the single currency.

US dollar (USD) retreats amid US tariff jitters

The US dollar came under pressure again on Wednesday as USD investors grew increasingly unnerved by the uncertainty surrounding US trade policy.

The USD selling bias remained in place despite stronger-than-expected US retail sales data, as analysts warned that March’s bump was inflated by consumers seeking to finalise their purchases before US President Donald Trump implemented his tariffs.

The US dollar may be vulnerable to further losses today, if investors continue to raise concerns over the potential impact of Trump’s tariffs on the US economy.

Canadian dollar (CAD) bolstered by BoC rate decision

The Canadian dollar (CAD) firmed yesterday as the Bank of Canada (BoC) concluded its latest policy meeting by leaving interest rates on hold, while also signalling it is in no rush to cut again until there is more clarity on how Trump’s tariffs will impact Canada’s economy.

Without any notable CAD data, movement in the ‘loonie’ may be tied to oil price dynamics today. If prices continue to rally, it may help underpin CAD exchange rates.

Australian dollar (AUD) muted on mixed jobs data

The Australian dollar (AUD) struggled to attract support overnight on Wednesday, following Australia’s latest jobs report. While unemployment held steady, rather than rising as forecast, employment growth proved softer than expected, limiting AUD demand.

New Zealand dollar (NZD) falters despite rising inflation

The New Zealand dollar (NZD) also came under pressure in overnight trade as a risk-off mood offset a stronger-than-expected domestic inflation print.

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