US dollar falls amid tariff anxiety

Pound (GBP) climbs amid general optimism

The pound (GBP) pushed higher yesterday amid a slightly brighter outlook for the UK economy.

News of a UK-India trade deal cheered investors, along with hopes for a UK-EU agreement. In addition, an upbeat impact assessment of the government’s planning and infrastructure reforms may have also boosted the pound’s appeal.

Sterling could find itself subdued today amid an ongoing lack of data ahead of the Bank of England (BoE) interest rate decision on Thursday.

Euro (EUR) muted amid German political uncertainty

The euro (EUR) was mixed yesterday, with political uncertainty in Germany putting some pressure on EUR after Chancellor-Designate Friedrich Merz failed to secure the majority needed to officially become Chancellor.

However, Merz managed to win the second vote in the afternoon which, paired with a decline in the US dollar (USD), spared EUR from losses.

A stronger-than-expected rise in German factory orders in March could support the euro today, although a forecast stalling of Eurozone retail sales growth in the same month may offset the upside later this morning.

US dollar (USD) weakens amid continued tariff anxiety

The US dollar came under pressure yesterday amid ongoing concerns about the impact of tariffs on the US economy.

Fears were underscored by the latest US trade data, which showed the deficit hitting a record $140.5bn in March as companies stockpiled ahead of the implementation of tariffs.

Today the US dollar could face muted movement as investors await the Federal Reserve’s interest rate decision this evening.

Canadian dollar (CAD) undermined by recession warning

The crude-linked Canadian dollar (CAD) was mixed yesterday, as an uptick in oil prices was offset by a report from ratings agency Fitch, which forecasts Canada falling into recession this year due to its trade war with the US.

With CAD data thin on the ground today, oil price dynamics may drive CAD movement.

Australian dollar (AUD) wavers as US and China plan trade talks

The Australian dollar (AUD) briefly rose overnight on the news that US-China trade talks are due to begin this week. However, the ‘Aussie’ couldn’t sustain these gains.

New Zealand dollar (NZD) rangebound despite upbeat employment data

Similarly, the New Zealand dollar (NZD) was initially supported overnight after New Zealand’s unemployment rate held steady in Q1, rather than rising as forecast, although NZD quickly surrendered these gains.

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