Pound wavers amid rising unemployment

Australian dollar (AUD) fades amid widespread risk aversion

On Tuesday, the Australian dollar (AUD) weakened amid a thoroughly downbeat market mood.

Amid continued concerns over further conflict in the Middle East, investors sought safer investment opportunities, leaving AUD to languish.

The ‘Aussie’ may continue to weaken today, if risk-averse trade remains the default for investors.

New Zealand dollar (NZD) slides amid risk-off trading conditions

The risk-sensitive New Zealand dollar (NZD) slipped against its safer peers during yesterday’s downbeat session.

Additionally, the ‘Kiwi’ was likely undermined by a dearth of domestic data, which kept the focus elsewhere.

NZD exchange rates may trade in a wide capacity today, following this morning’s inflation data for the first quarter of 2024.

Pound (GBP) capped by increasing unemployment

The pound (GBP) saw its movements limited yesterday, following an increase in unemployment in February.

The UK jobless rate jumped to 4.2% from January’s upwardly revised 4%, as joblessness rose and vacancies fell. This indicated slack in the UK labour market and prompted increased bets on a summer interest rate cut from the Bank of England (BoE).

Sterling may weaken this afternoon following the latest UK consumer price index. With both core and headline inflation forecast to cool, this may further boost existing rate cut bets and pressure GBP.

Euro (EUR) supported by improving German economic outlook

Germany’s ZEW economic sentiment index for April printed above forecasts yesterday, lifting the euro (EUR).

Morale in the Eurozone’s largest economy rose to its highest level in over two years, raising hopes about the country’s outlook and reflecting positively on EUR exchange rates.

Confirmation of cooling Eurozone inflation could restrict the common currency’s movement today, if March’s final CPI reading remains unchanged.

US dollar (USD) boosted by risk-averse trade

Downbeat trading conditions supported the US dollar (USD) yesterday, amid growing concerns over conflict in the Middle East.

The threat of an escalation between Israel and Iran served to undermine investor confidence on Tuesday. With the region on the brink of a wider war, markets favoured the safe-haven ‘greenback’ despite a lack of other data.

Risk appetite is likely to continue driving the US dollar today, due to a short supply of impactful macroeconomic data.

Canadian dollar (CAD) slumps amid BoC rate cut bets

The Canadian dollar (CAD) fell yesterday evening after Canada’s core inflation rate cooled to 2%, hitting the Bank of Canada’s (BoC) target. This prompted bets on a coming rate cut from the BoC, thereby undermining CAD.

Oil prices could be the primary driver of movement for the crude-linked ‘loonie’ today. If prices continue to soften, CAD may weaken.

Data releases

April 17th 16:00 GBP Inflation Rate (Mar)                                              3.1%

April 17th 19:00 EUR Inflation Rate (Mar)                                              2.4%