Pound Sterling (GBP)

Having traded poorly in the wake of the Manchester terror attack, the Pound has since made tentative gains against the Euro and US Dollar.

The latest UK news has seen the terror threat level upgraded to critical, which means another attack may be imminent. This upgrade also means that soldiers will now guard key locations around the country, with the aim of preventing another such incident.

Home Secretary Amber Rudd has stated that the critical alert status will be ‘temporary’, so hopes are that the nation can return to normalcy in the coming weeks.

If traders return their focus to economic news on Thursday, the Pound could drop. Quarter-on-quarter Q1 GDP growth is expected to slow, while a smaller annual rise is predicted.

If business investment stats, also out on Thursday, turn negative for the second quarter in a row then the Pound could be weakened further against its peers.


Euro (EUR)

The Euro has dropped against the Pound today, but has made a fractional gain against the US Dollar.

This mixed movement follows a rise in German GfK consumer confidence but a dovish speech from European Central Bank (ECB) official Peter Praet.

Praet has stated that the ECB needs more evidence of consistent inflation before considering policy measures.

The Euro could be moved on an incoming speech from ECB President Mario Draghi, while a later French jobless claims figure could also prove impactful. French claims previously posted 43.7k in March, so a major drop in April could boost Euro demand.


US Dollar (USD)

As Donald Trump moves onto Italy as part of his first overseas tour, the US Dollar has dropped against the Euro and Pound.

In Trump’s absence, the 2018 budget plan is being scrutinised and has already attracted criticism from Republican officials.

The plans aim to reduce spending by $3.6tn, mostly through cutting social support measures like medical insurance, food stamps and student loans.

This has been received poorly by both political parties, with Republican Senator John McCain declaring that the budget is ‘dead on arrival [and] inadequate to the challenges we face’.

Aside from any further budget news, the US Dollar could also be influenced today by existing home sales figures for April. These are forecast to show a slight slowdown, but it may not be enough to trigger additional USD losses.

Later on, May’s Federal Reserve minutes will come out. If policymakers are still pushing for a June interest rate hike, then a US Dollar rally could occur.


Australian Dollar (AUD)

The Australian Dollar has dropped against the Pound, Euro and US Dollar today, following disappointing construction output stats.

Over the first quarter, construction work fell by -0.7%, which means that there could be less houses being built. This implication has done nothing to cool Australia’s hot housing market, so AUD demand has fallen.

The next major Australian data will also involve the housing market, consisting of Tuesday’s building permits result for April. If permits fall heavily then this could mean further bad news for housing, which may trigger further AUD losses.


New Zealand Dollar (NZD)

After a better-than-expected trade balance result for April, the New Zealand Dollar has made moderate gains against the Euro and US Dollar. Against the Pound, however, NZD has dipped due to GBP strength.

The April trade balance rose from 277m to 578m, although a dip to 267m had been originally forecast.

The next NZ data to watch out for will be Monday’s building permits figure for April. This previously dropped by -1.8%, so a sharp rise may be needed to trigger NZD gains.


Canadian Dollar (CAD)

The Canadian Dollar has traded tightly against the Pound, Euro and US Dollar today. This uncertainty among traders comes in spite of a rise in wholesale sales on Tuesday and a recent climb in crude oil costs.

Today will bring the Bank of Canada (BOC) interest rate decision for May, which is expected to see another rate freeze at 0.5%. BOC officials could still push CAD demand up if they speak favourably of Canadian economic conditions.