The pound initially opened last week’s session on stable footing as GBP investors welcomed Scotland’s lifting of its remaining coronavirus restrictions.
Meanwhile, the pound looks to be off to a poor start so far this morning, with GBP/EUR sinking to €1.1476 and GBP/USD sliding to $1.3735. GBP/CAD has tumbled to C$1.7208, while GBP/AUD and GBP/NZD retreat to AU$1.7741 and NZ$1.9177, respectively.
Coming up, the focus today will be on the latest US consumer confidence index. Will another jump in household sentiment help to boost the US dollar?
What’s been happening?After struggling through the first half of the week, the US dollar managed to stabilise during yesterday’s trading session in response to some upbeat data releases.
US retail sales sailed past expectations last month as sales growth soared from -5.9% to 9.8%, while initial jobless claims fell a lot further than forecast in the first week of April, with new claims falling to their lowest level since the start of the coronavirus pandemic.
This uptick in the US dollar was partly to blame for a pullback in the euro on Thursday as the negative correlation between the pairing dragged on the single currency.
However, this weakness in the euro was accentuated by concern over Europe’s vaccination programme, amid fears that Denmark's decision to halt the use of the AstraZeneca vaccine over blood clot concerns could be followed by other countries.
These same vaccine concerns also weighed on the pound yesterday, as the UK’s rollout could be disrupted significantly if the UK also reconsiders its use of the AstraZeneca jab, which has already been restricted to the over 30s.
What’s coming up?Looking ahead, the biggest data release of the day will be the publication of the University of Michigan’s US consumer sentiment index.
Economists are forecasting that consumer morale will have continued to climb in April after its largest single-month increase since 2013 last month, which could help to propel the US dollar higher later this afternoon.
In the meantime, the publication of the Eurozone’s consumer price index could weigh on the euro this morning if March’s finalised figures confirm that underlying inflation in the bloc weakened.
Meanwhile, in the continued absence of any UK data of note, GBP investors may look to local politics for direction, with uncertainty over the looming Scottish parliamentary elections potentially limiting any upside in the pound.
Currencies Direct is one of Europe's leading non-bank providers of currency exchange and international payment services. Since we were formed in 1996, we've maintained our focus on providing innovative foreign exchange and international currency transfer services to corporations of all sizes, online sellers and private individuals. We have also expanded our services to provide dynamic and pioneering "business to business" solutions to help companies, tier 2/3 banks and other non-bank financial institutions to process their international payments. Our headquarters are in the City of London (United Kingdom) and we have operations in continental Europe, Africa, Asia, and the United States. Currencies Direct is jointly owned by private equity firms Palamon Capital Partners and Corsair Capital.