Pound Sterling (GBP)
On the day of the last pre-election Prime Minister’s Questions, the Pound has advanced slightly against the Euro but dropped against the US Dollar.
This is essentially the last public debate between the Prime Minister and Opposition Leader Jeremy Corbyn, due to the PM’s refusal to enter televised debates.
The Pound could rise if it looks like Theresa May has won the day’s arguments. This is because a greater Conservative majority would imply a stronger hand for the PM in Brexit negotiations.
After two days of rallying on the French Presidential Election vote, the Euro has finally run out of steam and dropped against the Pound and US Dollar.
Positive Eurozone data has been limited, mainly covering rising Dutch business confidence.
The Euro could regain its strength on Thursday’s Eurozone and German confidence data. Forecasts have been for rising confidence in most areas, which may be enough to push the Euro back up against peers.
US Dollar (USD)
The US Dollar has risen slightly against the Pound and Euro today, but may experience high turbulence later on.
President Donald Trump is due to announce ‘maybe the biggest tax cut we’ve ever had’ today. While the exact details of Trump’s tax reforms are uncertain, one expected policy is a corporation tax cut from 35% to 15%.
This would be a significant gamble, as reduced corporate tax income would need to be balanced by more businesses moving to the US under the lower tax rate.
If this proposal and others seem economically nonviable, the US Dollar could plunge against its major currency peers.
Australian Dollar (AUD)
Australian Dollar losses have exceeded -0.3% against the Pound, Euro and US Dollar today, despite first quarter inflation rising to 2.1% on the year.
This increase puts inflation within the Reserve Bank of Australia (RBA) target bracket of 2-3%, but is not considered enough to force an RBA interest rate hike. Additionally, both quarterly and annual inflation figures fell below forecasts.
This essentially negated any optimism generated by the news, leaving more pessimistic iron ore forecasts to lower the Australian Dollar’s value.
Tying into Trump’s tax announcement, if the US Dollar drops sharply then the Australian Dollar could conversely rise on increased risk sentiment.
New Zealand Dollar (NZD)
As New Zealand’s slow data week continues, the New Zealand Dollar has dropped by over -0.4% against the Euro, Pound and US Dollar.
A recent report from construction surveyors Rider Levett Bucknall (RLB) has forecast threats to New Zealand’s construction sector, lowering NZ economic confidence.
RLB’s report highlights a possible drop in immigration, increased Australian economic competition and falling tourist numbers as factors that could severely limit construction, which would drive up property costs and risk creating a market bubble.
Thursday’s key NZ data will be March’s trade balance. A rise from a deficit to a surplus is forecast, which could be enough to trigger a New Zealand Dollar rise.
Canadian Dollar (CAD)
The Canadian Dollar has dipped against the US Dollar today but risen moderately against the Pound and Euro.
This follows US tariffs being added to Canadian wood exports; the National Bank of Canada has downplayed any major negative impacts from the decision.
Despite its recent rise, the Canadian Dollar could dip against peers today if February’s retail sales fall as forecast.