Euro rallies as Eurozone inflation outpaces expectations
Philip McHugh May 6th 2025 - 2 minute read
Pound (GBP) subdued amid political jitters
The pound (GBP) was muted on Friday as GBP investors digested the early results from the UK’s local elections.
A disappointing performance by Labour sapped Sterling sentiment as it stoked concerns over potential fallout within the party and what this could mean for government unity.
Turning to the first half of this week, movement in the pound may prove limited as GBP investors brace for the Bank of England’s (BoE) interest rate decision on Thursday.
Euro (EUR) strengthens on stronger-than-expected inflation print
The euro (EUR) rallied on Friday, in response to the Eurozone’s latest consumer price index.
April’s preliminary CPI figures reported both headline and core inflation outpaced expectations, lifting the single currency as investors trimmed European Central Bank (ECB) interest rate cut bets.
The Eurozone’s latest PPI figures will be in focus this morning. If producer prices slowed as expected in March, it could place some pressure back on the euro.
US dollar (USD) falters as market sentiment improves
The US dollar (USD) trended broadly lower at the end of last week’s session as risk-positive flows limited demand for the safe-haven currency.
Tempering these losses, however, was the latest US payroll data, which reported the US economy added more jobs than expected last month.
Looking ahead, the Federal Reserve’s looming interest rate decision could limit movement in the US dollar today.
Canadian dollar (CAD) undermined by oil price weakness
The Canadian dollar (CAD) faced headwinds on Friday as the appeal of the commodity-linked currency was curbed by sliding oil prices.
Coming up, Canada will publish its latest Ivey PMI later this afternoon. A robust print in April could offer support to the ‘loonie’.
Australian dollar (AUD) bolstered by election results
The Australian dollar (AUD) garnered support at the start of this week’s session, after the federal election saw Prime Minister Anthony Albanese’s Labor party improve its vote share as it won a second term.
New Zealand dollar (NZD) underpinned by risk-on flows
The New Zealand dollar (NZD) also got off to a positive start this week amid a broadly optimistic market mood.
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Written by
Philip McHugh