1. Pound Lower As Doubts Over BOE Rate Hike Rise
The British pound plummeted to two-week lows against the dollar this morning after the Bank of England Governor Mark Carney dampened expectations for an interest rate hike in May. On the flipside the dollar firmed, edging near a seven-week high, while the yen dipped as consern over Syria and the US/China trade war eased. Disappointing U.K. retail sales released earlier on Thursday also raised some doubts over the outlook of UK rate hikes and put more pressure on the sterling.*
2. USD Higher On Treasury Yields
The biggest story in the financial markets today was the impressive rise in US Treasury yields which caused the dollar to rally against its major rivals. Two-year yields hit fresh 9-year highs as the U.S. 10-Year rose above 2.9% after a stronger than expected Philadelphia Fed survey and relatively low jobless claims. Talk of ongoing denuclearization in North Korea kept the JPY somewhat supported against the USD so there wasn’t a significant rise on USD/JPY but the greenback rallied to four week highs against a weaker sterling.*
3. Euro, Aussie and Kiwi Lower Against Strong Greenback
The euro dropped against a stronger dollar in early morning trading on a weak EU current account balance and as strong treasury yields pushed the USD higher. Softer data also drove the Australian and New Zealand dollars lower against the US dollar. Specifically, Australia reported significantly weaker job growth in March while New Zealand’s CPI growth slowed to 1.1% from 1.6% causing NZD/USD to extend its slide for the third consecutive day. USD/CAD, will be in focus Friday with retail sales and consumer prices scheduled for release at 12:30 GMT. Both reports are expected to be softer, which could cause the CAD to weaken thus pushing USD/CAD higher..***
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