Pound Sterling

Pound Slips amid Fresh Calls for PM’s Resignation, US Dollar Soars amid Risk-Off Mood

Pound (GBP) Slides as Confidence in Johnson Falters

A poor outlook for the UK economy continued to weigh on the Pound (GBP) today. Retail sales and consumer confidence figures came in below-forecast this week. A sharp decline in confidence in the UK’s manufacturing sector likely also helped keep GBP lower today.

The Pound may have seen further headwinds today due to renewed calls for PM Boris Johnson’s resignation. The fresh uproar came after MPs from all parties voted on Thursday for parliament to begin an investigation into Johnson over his conduct.

Looking to the rest of the week for Sterling, distributive trades figures on Wednesday could pull the currency lower. A speech from Bank of England (BoE) Governor Andrew Bailey could also keep GBP suppressed this week if he echoes his previously cautious tone.

Euro (EUR) Dips as Germany Set to Slash Growth Forecasts

The Euro suffered from a renewed drive by investors to the US Dollar (USD) today. Reports that Germany is set to cut its growth forecasts and hike its inflation predictions for 2022 may also have weighed on EUR today.

On the other hand, a rise to German business morale despite the war in Ukraine may have limited major losses for the single currency. Hawkish remarks from European Central Bank (ECB) policymakers may have also helped prop up EUR today.

Looking ahead, a speech from ECB President Christine Lagarde on Wednesday could push the Euro higher if she reaffirms expectations of a 2022 rate hike. On Friday, German and Eurozone GDP growth figures are both forecast to tick upward which could also help bolster the single currency.

US Dollar (USD) Soars amid Risk-Off Trading

The US Dollar (USD) benefitted from a risk-off market mood, climbing steadily against its competitors. Fears of a slowdown in growth across China and market jitters owing to the Ukraine-Russia conflict saw investors flock to the safe-haven ‘Greenback’.

USD also continued to find support from the Federal Reserve’s hawkish forward outlook. Speaking on Thursday, Fed Chair Jerome Powell signalled that a 0.5% interest rate hike would be ‘on the table’ at the central bank’s May meeting.

Looking to the coming week for USD, a sharp downtown to GDP growth in the first quarter of 2022 could limit gains for the currency if figures print as forecast. Losses for the US Dollar could be limited however should the PCE price index, the Fed’s preferred measure of inflation, climb higher on Friday as expected.

Australian Dollar (AUD) Tumbles amid China Lockdown Fears

Mass Covid-19 testing in Beijing prompted fears of further lockdowns in China and caused the Australian Dollar (AUD) to plummet lower today. The news also brought a sharp downturn to global commodity prices, which also likely pulled the ‘Aussie’ lower today.

Wednesday’s inflation figures for the first quarter of 2022 could boost AUD if they rise as forecast. The figures could also prompt bets on a rate hike from the Reserve Bank of Australia (RBA), potentially also pushing the Australian Dollar higher.

Canadian Dollar (CAD) Climbs as Macklem Signals Aggressive Rate Hikes

The Canadian Dollar (CAD) made steady gains against many of its rivals today despite the price of oil tumbling by around 6%. Comments from Bank of Canada (BoC) Governor Tiff Macklem likely helped CAD to soar. Macklem stated that the central bank would act ‘forcefully’ in order to control soaring inflation.

Looking ahead for CAD, speeches from multiple BOC board members throughout the week could bolster the currency off the back of a hawkish outlook.