Pound Sterling

Pound Climbs Despite GDP Slip, Euro Boosted by Macron Voting Figures

Pound (GBP) Gains Despite Poor GDP Figures 

The Pound (GBP) climbed against riskier currencies today, although remained subdued against many of its risk-averse competitors today.  

Upward momentum for Sterling was likely limited by poor month-on-month GDP figures today. Whilst the GDP figures are now 1.5% above pre-pandemic levels, the monthly figures came in below forecast.  

Looking ahead for Sterling, a boost to average earnings figures on Tuesday could renew confidence in the UK economy on Tuesday. Predicted fresh highs for UK inflation on Wednesday could help GBP climb higher amid expectations of an interest rate hike from the Bank of England (BoE). 

Euro (EUR) Bolstered as Macron Leads First Round Voting  

Incumbent Emmanuel Macron’s strong performance in the first round of the French Presidential election on Sinday likely kept the Euro (EUR) buoyed today. The first round of voting saw Macron finish on 27.8% of the vote, whilst far-right candidate Marine Le Pen captured 23.1%.  

On the other hand, major gains for the single currency may have been limited by the Ukraine-Russia conflict. Peace talks efforts continued to remain uncertain today. Russian foreign minister Sergei Lavrov made clear that Russian forces would not cease military operations when the two sides met again. 

A forecast rise to German inflation on Tuesday could push EUR higher. The European Central Bank’s (ECB) interest rate decision on Thursday could see the Euro soar should they hike rates against expectations. 

US Dollar (USD) Climbs amid Hawkish Fed Tone 

A cautious risk appetite helped to boost the US Dollar (USD) against its riskier contenders today. The safe-haven ‘Greenback’ remained muted against its risk-averse rivals today. Major losses for USD were likely limited by expectations of an aggressive series of interest rate hikes from the Federal Reserve.  

The Fed is expected to maintain a hawkish policy in the coming months. Multiple Fed board members have spoken out in recent weeks on their view that higher rate hikes may be necessary to curb soaring inflation. Speaking on Sunday, policymaker Loretta Mester said it was ‘very important’ that the central bank get inflation under control. 

A further expected rise to US inflation for March could push USD higher on Tuesday. March’s PPI figures, the Fed’s preferred measure of inflation, could also boost the currency should they rise as forecast on Wednesday.  

Australian Dollar (AUD) Falls amid China Lockdowns 

The Australian Dollar (AUD) dropped against its competitors today amid a pullback in commodity prices. The ‘Aussie’ struggled to make gains amid falling iron ore prices. Covid-19 lockdowns across China have harmed demand for the currency as steel production in the country remains limited.  

Looking ahead for AUD, a forecast fall in business and consumer confidence this week could harm the currency’s prospects. On the other hand, Thursday’s tight employment figures could push the Aussie higher amid expectations of a rate hike from the Reserve Bank of Australia (RBA). 

Canadian Dollar (CAD) Slips as Oil Prices Slide 

The Canadian Dollar (CAD) steadily fell against its rivals today. The commodity-tied ‘Loonie’ continued to suffer amid a downturn in the price of crude oil. Lockdowns across China to battle a surge of Omicron-related Covid cases have prompted fears of limited demand for the commodity.  

Looking to the week ahead for the Canadian Dollar, Wednesday’s interest rate decision from the Bank of Canada (BoC) could see the currency soar should the central bank raise rates as expected.