Pound Sterling
Thursday was not a positive day for the Pound, as markets were unimpressed to find that no other Bank of England (BoE) policymakers had joined noted hawk Kristin Forbes in voting for an interest rate hike. While the Bank’s forecasts remained largely unchanged this was accompanied by the caution that these projections are based on Theresa May securing a softer form of Brexit. As March’s visible trade deficit was found to have widened dramatically to -13.44 billion confidence in the outlook of the UK economy weakened, leaving investors little reason to favour Sterling.

Euro
After European Central Bank (ECB) President Mario Draghi reiterated that monetary policy is likely to remain accommodative for the foreseeable future the appeal of the Euro weakened. This dovish outlook was reinforced by the latest ECB Economic Bulletin. Although policymakers remain confident in the improving health of the Eurozone economy they remain unconvinced that there has been any meaningful uptick in inflation. This kept the single currency on a weaker footing against many of its rivals, although hopes remain high for tomorrow’s German GDP report.

US Dollar
Tuesday’s shock firing of FBI Director James Comey continued to weigh on market sentiment, with confidence in the Trump administration still damaged. Better-than-expected jobless claims figures offered the ‘Greenback’ something of a rallying point, however, with signs continuing to point towards a robust US labour market. With investors still betting that the Federal Reserve will raise interest rates at its June policy meeting USD exchange rates are likely to hold onto a degree of underlying support.

Australian Dollar
Copper prices strengthened further on Thursday, offering support to the commodity-correlated ‘Aussie’. An improved base metal market helped to overshadow the controversial bank levy introduced in the 2017 Federal Budget. Reaction to the policy has dented confidence in the outlook of the Australian economy, with consumers likely to suffer if the big five banks are prompted to pass this on to their customers. If the backlash builds, though, the antipodean currency may struggle to gain further traction.

New Zealand Dollar
Disappointment greeted the Reserve Bank of New Zealand (RBNZ) policy meeting overnight, as the central bank proved less optimistic than hoped. Governor Graeme Wheeler noted that the bank is not seeing enough evidence of higher inflationary pressure to alter its policy outlook. This seemed to reduce the chances of the RBNZ raising interest rates for the foreseeable future, putting renewed pressure on the ‘Kiwi’. Even so, after the initial bearishness the New Zealand Dollar soon returned to an uptrend as risk appetite remained solid.

Canadian Dollar
Brent crude broke back above the psychologically important US$50 per barrel mark in response to a larger-than-expected drawdown in US stockpiles. However, as global supply glut worries are unlikely to fade any time soon it was not long before the Canadian Dollar returned to a weaker footing. Demand for the ‘Loonie’ was also discouraged by March’s new housing price index data, with the housing market showing further signs of slowing.