Pound (GBP) Firms on Budget Announcement
The Pound (GBP) trended higher during yesterday’s trading session, following the announcement that the UK Budget will be published on 11 March as planned.
There had been some concern that the already delayed budget could be postponed again, following the resignation of Sajid Javid as Chancellor and the appointment of his replacement, Rishi Sunak just last week.
However, Sterling’s gains were capped somewhat by the publication of the UK’s latest employment report, as wage growth was shown to have slowed to just 2.9% in December.
Coming up today, will a rebound in UK inflation last month help the Pound to sustain its upward momentum this morning?
Euro (EUR) Reels from Sharp Fall in ZEW Surveys
The Euro (EUR) fell across the board on Tuesday as EUR investors were left dismayed by the latest ZEW surveys for Germany and the wider Eurozone.
These revealed economic sentiment fell off a cliff edge this month as the coronavirus outbreak in China has stirred up considerable panic in the bloc, and particularly in German were the are fears this will be enough to tip the country into a recession this year.
In the absence of any notable data expect the mood surrounding the euro to remain largely gloomy today, amidst ongoing concerns about the health of the Eurozone economy.
US Dollar (USD) Strengthens in Risk-Off Trade
The US Dollar (USD) enjoyed broad support yesterday, with ongoing panic regarding the coronavirus outbreak in China ensuring the safe-haven currency remained firmly in demand.
Further buoying the US Dollar was the publication of the Empire State manufacturing index, which jumped to a nine month high and significantly outpaced expectations for a more modest increase in factory activity.
On the docket for USD investors today will be the release of the minutes from the Federal Reserve’s latest policy meeting. Will a slightly dovish outlook from the bank limit the appeal of the US Dollar today?
Canadian Dollar (CAD) Undermined by Slump in Oil Prices
The Canadian Dollar (CAD) ticked lower on Tuesday, with the commodity-linked currency weakening in response to a near 2% slump in oil prices.
However the ‘Loonie’ may make a rebound later today as economists forecast January’s consumer price index will reveal another rise in domestic inflation.
Australian Dollar (AUD) Flounders amidst Coronavirus Panic
The Australian Dollar (AUD) retreated on Tuesday, with the risk-sensitive ‘Aussie’ being shunned by investors as the coronavirus remained firmly in focus following a warning from tech giant Apple.
Looking ahead, Australia’s latest jobs report could put some more pressure on the ‘Aussie’ later tonight on the expectation that employment growth will have slowed last month.
New Zealand Dollar (NZD) Tumbles in Risk-Off Trade
The New Zealand Dollar (NZD) suffered from a significant sell-off on Tuesday, with the coronavirus crisis prompting investors to steer well clear of the ‘Kiwi’.