US dollar slides as Trump’s tax bill raises debt concerns

Pound (GBP) recovers despite lukewarm data

The pound (GBP) stumbled at the start of yesterday’s session after higher-than-forecast government borrowing raised fears of further tax hikes in the autumn.

Sterling managed to recover as the day progressed, thanks to a better-than-expected UK services PMI. Although the figures only marginally beat forecasts and showed that activity practically stalled, this was seemingly enough to lift the pound against its weaker peers.

The UK’s retail sales figures for April could support the pound today. Sales growth smashed forecasts in April, printing at 1.2% rather than 0.2%, thanks to favourable weather.

Euro (EUR) undermined by downbeat PMIs

The euro (EUR) was mixed on Thurday, with the safer single currency rising against riskier rivals thanks to the souring market mood.

However, EUR slipped against its stronger counterparts after the Eurozone PMIs reported a surprise contraction in private sector activity this month.

Today, the single currency could strengthen after Germany’s final GDP growth rate for the first quarter was revised up from 0.2% to 0.4%.

US dollar (USD) recovers amid strong PMIs

The US dollar (USD) ticked higher yesterday as a souring market mood boosted the safe-haven ‘greenback’.

Stronger-than-expected S&P Global PMI results further supported USD in the afternoon. Although the surveys aren’t as impactful as the ISM releases, they still lifted the US dollar by showing accelerating activity in manufacturing and services.

The ‘greenback’ ends the week on the back foot, as USD investors turn their focus to Donald Trump’s tax and spending bill. Concerns about rising debt triggered notable US dollar weakness in overnight trade.

Canadian dollar (CAD) steady despite falling oil

The crude-linked Canadian dollar (CAD) showed some resilience yesterday, firming against weaker rivals despite a drop in oil prices and a sharper-than-expected decline in Canadian producer prices.

Looking ahead, Canada’s latest retail sales figures are the focus for CAD investors today. Could an expected decline in sales in April put pressure on the Canadian dollar?

Australian dollar (AUD) rises amid USD decline

The Australian dollar (AUD) found some success overnight as a pullback in the US dollar benefitted the ‘Aussie’ and lifted the market mood.

New Zealand dollar (NZD) buoyed by upbeat sales data

The New Zealand dollar (NZD) also inched higher against some rivals last night as New Zealand retail sales growth for the first quarter of 2025 beat forecasts.

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