Pound Sterling (GBP)
With the British steel crisis dominating headlines, the UK Pound softened versus a number of its major peers. Tata Steel announced intentions to sell the business and completely withdraw from the UK. This could see massive job losses and hold back the government’s plans to make the north an industrial powerhouse. Mixed results from domestic data did little to offset GBP losses. Whilst fourth-quarter Gross Domestic Product was upwardly revised and Business Investment bettered expectations during the same period, the British Current Account deficit widened significantly. With uncertainty surrounding the UK’s steel industry adding to uncertainty caused by the EU referendum, Sterling futures are looking bleak.
Although Eurozone Consumer Prices remained in deflation territory in March, the single currency advanced versus most of its major peers. The appreciation can be linked to the fact that the inflation measure relates to a period prior to the ECB introducing its latest stimulus measures. What’s more, March’s core inflation measure eclipsed expectations. Also supportive of Euro gains is the current US Dollar weakness.
US Dollar (USD)
The US asset continues to endure headwinds caused by reduced Federal Reserve rate hike bets following a dovish speech from Chairwoman Janet Yellen. The Fed Chief essentially quashed hopes of a near-term rate hike after urging caution against the backdrop of China’s economic woes. There is potential for US Dollar changes on Thursday afternoon, however, with Initial Jobless Claims and Continuing Claims data due for publication.
Australian Dollar (AUD)
Reduced Federal Reserve rate hike bets have provided near-term support for the Australian Dollar as traders seek high-yielding assets. A massive drop in February’s New Home Sales wasn’t enough to offset ‘Aussie’ (AUD) gains with Private Sector Credit bettering expectations on both a monthly and annual basis in February. Rising gold prices also supported AUD gains.
New Zealand Dollar (NZD)
Much like its oceanic counterpart, the New Zealand Dollar (NZD) continues to gain thanks to US Dollar weakness and speculation that the Fed will hold the overnight cash rate for a considerable time to come. Rising Asian stock values also aided demand for the commodity-sensitive antipodean currencies.
Canadian Dollar (CAD)
Although US crude oil inventories rose by less-than-expected, crude oil prices failed to breach the $40 a barrel mark. As a result, the Canadian Dollar softened versus a number of its major peers. Later today, the Canadian Dollar is likely to see considerable volatility in response to January’s Gross Domestic Product data.