Pound Sterling (GBP)

Despite registering disappointing domestic data, with UK Manufacturing PMI showing output slowed beyond expectations, the Pound advanced across the board. The appreciation can be linked to consolidation trading as Sterling’s massive depreciation in response to EU referendum uncertainty was seen to be overdone. That is not to say that EU referendum uncertainty has abated, but traders may feel they have jumped the gun with another four months before the June 23rd vote. There is certainly room for further Sterling downside as we draw closer to the vote.


Euro (EUR)

Amid mounting speculation that the European Central Bank (ECB) will look to ease monetary policy this month the Euro softened versus its major peers. The disappointing inflation data for the Eurozone in February all-but-confirmed the notion that ECB policymakers will have no choice but to employ aggressive stimulus measures. Eurozone economic data produced mostly positive results today but the ECB’s easing bias overshadowed data. One particularly positive result, however, was Eurozone Unemployment which unexpectedly dropped from 10.4% to 10.3% in January.


US Dollar (USD)

Although Euro weakness is usually supportive of US Dollar gains, the North American asset has registered a number of daily losses versus its peers. The depreciation can be linked to a speech from Federal Reserve official William Dudley who was pessimistic regarding the outlook for the US economy. This has amplified trader concerns that the Federal Reserve will not look to tighten monetary policy any time soon. Later today, ISM Manufacturing data is very likely to provoke USD volatility.


Australian Dollar (AUD)

The Reserve Bank of Australia (RBA) opted to hold the overnight cash rate at 2.0% which allowed the Australian Dollar to edge higher versus a number of its major peers. The appreciation was somewhat limited, however, thanks to RBA jawboning after Governor Glenn Stevens delivered a dovish accompanying speech. There is a high likelihood that the RBA will ease policy at least once this year against the backdrop of China’s economic woes. Disappointing data out of China, which showed manufacturing output contraction deepened, also weighed on ‘Aussie’ (AUD) gains.


New Zealand Dollar (NZD)

Similarly to its Oceanic neighbour, the New Zealand Dollar softened in response to China’s disappointing data. However, the weaker US Dollar following the Dudley speech has seen the ‘Kiwi’ (NZD) avoid a larger depreciation. Later today, the Global Dairy Auction is likely to have a significant impact on New Zealand Dollar movement.


Canadian Dollar (CAD)

With crude oil prices edging higher and the US Dollar edging lower, the Canadian Dollar ticked higher versus a number of its major peers. Gains have been somewhat limited, however, ahead of Gross Domestic Product data due this afternoon. December’s GDP is expected to slow to 0.0% which would likely coincide with ‘Loonie’ (CAD) depreciation.