The Pound (GBP) remained subdued yesterday as figures indicated a deterioration in UK retail conditions this month. The Confederation of British Industry’s (CBI) latest distributive trades survey plummeted to a record low in April, with retailers grappling with mounting pressure from rising costs and a worsening outlook. With little UK data scheduled for release today, Sterling may lack clear direction, especially as investors await the Bank of England (BoE) interest rate decision later this week.
The Euro (EUR) edged higher on Monday, benefiting from its inverse relationship with the US dollar (USD) as the latter weakened. However, gains in the single currency were limited by data revealing German consumer confidence for May fell to its lowest level in three years. Looking ahead, the absence of major Eurozone data releases today may leave the euro to track broader market sentiment.
The US dollar (USD) started the week on the back foot as optimism over a potential diplomatic resolution in the Middle East reduced demand for safe-haven assets. Concurrently, expectations that Kevin Warsh will be confirmed as the next Chair of the Federal Reserve contributed to the upbeat market tone, further weighing on the ‘greenback’. Looking forward, USD movement may be muted today as investors hold off on making major moves ahead of the Fed’s interest rate decision on Wednesday.
The Canadian dollar (CAD) outperformed many of its peers on Monday, supported by a continued climb in global oil prices despite prospects of the Strait of Hormuz reopening. Oil price trends are likely to remain the key driver for the ‘loonie’ today, with further upside possible if prices extend their gains.
The Australian dollar (AUD) moved lower in overnight trade after reports suggested US President Donald Trump is dissatisfied with Iran’s latest proposal to reopen the Strait of Hormuz.
The New Zealand dollar (NZD) also declined in overnight trading as a softer market mood dampened demand for risk-sensitive currencies.
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