US dollar recovers on hopes US can sidestep recession

Pound (GBP) finds feet amid trade hopes

After a sluggish start to the day yesterday, the pound (GBP) then managed to gain ground in the evening.

The increasingly risk-sensitive currency was lifted by an improving market mood, while hopes that the UK may be less badly affected by growing trade tensions also supported Sterling.

The UK’s PMI surveys are the focus for GBP investors today. A shock contraction in UK business activity this month could see Sterling slide.

Euro (EUR) slips as consumer morale declines

The euro (EUR) softened yesterday, with an improving mood and a recovering US dollar (USD) both weighing on the single currency.

Furthermore, the Eurozone’s latest consumer confidence report showed that morale deteriorated more than expected in April, dashing hopes for consumer-led growth in the bloc’s economy.

The Eurozone PMIs showed that private sector activity slowed to a near halt this month. This could put pressure on the common currency.

US dollar (USD) recovers following IMF outlook

The US dollar initially came under pressure yesterday amid ongoing concerns about Donald Trump’s approach to economic policy and the possibility of him challenging the Federal Reserve’s independence.

However, USD staged a decent comeback in the evening as the IMF said that it doesn’t expect a US recession this year as the American economy was in a strong position before Trump announced his tariffs.

The US S&P PMIs are also due out today. Although not as impactful as the ISM releases, they could still dent USD if they show weakening business activity in April.

Canadian dollar (CAD) buoyed by rising oil prices

The crude-linked Canadian dollar (CAD) was able to find modest gains against its weaker rivals yesterday thanks to a recovery in oil prices.

With Canadian data in short supply through today’s session, oil price dynamics may influence CAD exchange rates. Could a continued recovery in crude prices support the Canadian dollar?

Australian dollar (AUD) boosted by easing tariff fears

The Australian dollar (AUD) leapt higher last night following comments from US treasury secretary Scott Bessent, who said that the current US tariffs on China were unsustainable and he expects a de-escalation soon.

New Zealand dollar (NZD) rises amid trade deal hopes

The New Zealand dollar (NZD) also jumped overnight as optimism swept markets following Bessent’s comments about US-China trade relations.

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