The US dollar trended broadly higher on Wednesday, supported by the publication of the latest US durable goods orders data.
Meanwhile, trade in the pound is mixed so far this morning, with GBP/EUR flat at €1.1649 and GBP/USD climbing to $1.2495. GBP/CAD is stable at CA$1.7090, while GBP/AUD and GBP/NZD hold steady at AU$1.9166 and NZ$2.0991, respectively.
Coming up, will the latest US GDP figures further push back Federal Reserve interest rate cut expectations and propel the US dollar to new highs this afternoon?
What's been happening?
The US dollar traded with modest gains yesterday, following the publication of the latest US durable goods orders data.
The 'greenback' firmed as order growth was shown to have accelerated at a faster-than-expected pace last month. Although a downwards revision to orders in February capped the US dollar's upside potential.
The uptick in USD exchange rates left the euro muted on Wednesday, with the strong negative correlation in the pairing offsetting an uptick in German business sentiment.
At the same time, the pound was left to trade sideways through yesterday's European session following some mixed data from the Confederation of British Industry (CBI).
While optimism in the UK manufacturing sector rose to its highest levels since 2021, industrial orders unexpectedly fell to a three-month low in April.
What's coming up?
Centre stage today will undoubtedly be the publication of the latest US GDP figures.
The initial estimate of GDP in the first quarter is expected to report growth in the US economy slowed from 3.4% to 2.5%.
However, USD investors may be more focused on whether strong consumer and government spending continues to fuel this growth. Strong spending could stoke inflation expectations and lead to a further trimming of Fed rate cut bets.
In the meantime, a speech by European Central Bank (ECB) policymaker Isabel Schnabel this morning could provide some support to the euro, after she hinted that the easing of the bank's monetary policy could be a long process.
For GBP investors the only data of note will be the CBI's latest distributive trades index. Will a decline in UK retail sales volumes this month pull the pound lower this morning?
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