GBP, EUR, and CAD Reach 5-Week Highs Against the U.S. Dollar
GBP
GBP/USD has climbed to 1.2675 (interbank), but sterling has retraced some gains from yesterday when it surpassed 1.2700 for the first time since April 10. GBP/EUR is at 1.1658 (interbank).
UK employment data revealed a third consecutive month of worsening job market conditions as the Unemployment Rate increased.
BoE policymakers remain concerned about high service inflation potentially hindering the disinflation process. The BoE is anticipated to reduce rates from a 16-year high this summer, yet robust GDP growth could postpone this until after the ECB's initial move.
Today, UK data is sparse, with MPC member Catherine Mann scheduled to speak tomorrow
No significant events are scheduled for today
EUR
EUR/USD is presently trading at 1.0870 (interbank), having slightly retreated Thursday after reaching its highest level since March 21.
The Euro gained against the U.S. dollar following yesterday’s U.S. inflation figures.
Eurozone GDP expanded by 0.3% quarter-on-quarter in Q1, signaling recovery from two consecutive quarters of contraction.
Expectations persist for the ECB to commence rate cuts from a record high in June, with markets anticipating up to three cuts this year, possibly in September and December.
Today’s Events (GMT):
09:00 - ECB Financial Stability Review
USD
The dollar index, measuring against a basket of currencies, edged 0.1% higher to 104.285 after touching a five-week low below 104 overnight.
Expectations of two interest rate cuts this year, starting possibly in September, were fuelled by the latest U.S. inflation data.
Wednesday’s consumer price index rose 0.3% in April, below the expected 0.4% gain, alleviating concerns after sticky first-quarter consumer prices prompted a reduction in rate cut expectations and raised worries of additional hikes.
U.S. Treasury yields fell to six-week lows as traders reassessed the Fed’s monetary policy trajectory.
Several Fed speakers are scheduled later, but substantial evidence will likely be required to alter rate cut expectations significantly.
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Today’s Events (GMT):
13:30 - Initial Jobless Claims - Forecast: 219K
13:30 - Philadelphia Fed Manufacturing Index (May) - Forecast: 7.7
14:15 - Industrial Production (Apr) - Previous: 0.00%
15:00 - Fed Vice Chair for Supervision Barr Speaks? ??????????????????????? ??????????? ?
15:30 - FOMC Member Harker Speaks ???????????????????? ??????????? ?
16:15 - Atlanta Fed GDPNow (Q2) - Forecast: 3.8%
16:30 - FOMC Member Mester Speaks???????? ?????????? ?
20:50 - FOMC Member Bostic Speaks
CAD
USD/CAD is trading at 1.3628 (interbank), having recovered from 1.3587 reached yesterday, the lowest since April 10th .
Yesterday, Canadian Manufacturing Sales disappointed, with March figures worse than expected. Sales contracted 2.1%, compared to the forecasted 1.4% decline.
Crude oil prices rose, with Brent Crude up 0.4% to $83.07 a barrel and WTI up 0.4% to $78.94 a barrel.
No major economic releases are scheduled for the rest of the week in Canada.
No significant events are scheduled for today
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