Pound bolstered by sticky inflation

Australian dollar (AUD) restricted by lack of data

On Wednesday, the Australian dollar (AUD) levelled out as limited domestic data undermined the risk-sensitive currency.

The ‘Aussie’ managed to remain afloat over the session, however, due a bullish market impulse which saw it rise against safer assets.

Australia’s latest jobs report is scheduled for release this morning. Will an uptick in unemployment dampen AUD?

New Zealand dollar (NZD) trims post-inflation gains

In the first quarter of 2024, inflation accelerated to 0.6%, which served to strengthen the New Zealand dollar (NZD) yesterday.

However, the ‘Kiwi’ was unable to maintain its advantage amid sliding commodity prices. This prompted it to level out against most peers, despite a cheery market mood.

Owing to a lull in data releases, NZD may struggle to find its footing today.

Pound (GBP) supported by persistent inflationary pressures

The pound (GBP) was underpinned yesterday, amid signs of stickier-than-expected inflation.

In March, headline inflation cooled to 3.2%, down from 3.4%. This was above forecasts of a 3.1% print, which decreased Bank of England (BoE) interest rate cuts. However, GBP saw its gains trimmed over the course of the session.

As data releases are set to taper off today, the pound may be unable to gain ground against its peers.

Euro (EUR) capped by growing central bank divergences

Signs of a growing divergence between the European Central Bank (ECB) and its peers weighed on the euro (EUR) yesterday.

ECB President Christine Lagarde suggested that if EU inflation continued to cool, the bank would begin to unwind its monetary policy. Increased rate cut bets saw the common currency’s movements restricted over the session.

The euro may remain rangebound this evening, if ECB Vice President Luis de Guindos echoes Lagarde’s view in his speech.

US dollar (USD) drops as market mood improves

Improved trading conditions weakened the US dollar (USD) yesterday, as levels of risk appetite increased over the session.

Additionally, hawkish comments from Federal Reserve Chair Jerome Powell failed to lift USD. While Powell advocated for keeping interest rates unchanged, his words did little to support the ‘greenback’.

Tonight, an uptick in initial jobless claims could dent the ‘greenback’ if it prints as forecast, as this may indicate cooling employment.

Canadian dollar (CAD) stifled by falling oil prices.

The Canadian dollar (CAD) struggled to attract investor support yesterday, as oil prices continued to slide.

As data remains thin on the ground, the ‘loonie’ may trade in tandem with oil prices. Should they continue to fall, CAD may struggle.

Data releases

April 18th 11:30 AUD Unemployment Rate (Mar) 3.9%

April 18th 11:30 AUD RBA Bulletin

April 18th 17:15 EUR ECB Guindos Speech

April 18th 22:30 USD Initial Jobless Claims (Apr 13) 215,000