Pound (GBP) Fluctuates amid Vaccine Uncertainty
The Pound (GBP) got off to a poor start on Tuesday, with the currency plummeting to multi-week lows against the majority of its peers following the news that several European countries had suspended the use of the AstraZeneca vaccine, which is seeing wide use in the UK.
However, Sterling was able to claw back the majority of its losses by the end of the session after the European Medicines Agency (EMA) said there is no indication that the AstraZeneca vaccine is linked to blood clots.
Looking ahead, we could see movement in the Pound remain limited through today’s session, with GBP investors likely to avoid making any aggressive bets ahead of the Bank of England’s (BoE) rate decision on Thursday.
Euro (EUR) Fails to Advance in Spite of Upbeat German ZEW Releases
The Euro (EUR) found itself on the back foot yesterday after a stronger-than-expected pickup in German economic sentiment this month provided only a temporary boost for the single currency.
This pullback in the Euro appeared to be driven by concerns that the suspension of the AstraZeneca vaccine in many parts of the EU will further delay the rollout across the continent.
Looking ahead, the publication of the Eurozone’s consumer price index (CPI) may leave the Euro on the back foot today as February’s finalised figures are likely to confirm inflation in the bloc stalled.
US Dollar (USD) Bolstered by Market Jitters
The US Dollar (USD) maintained its positive trajectory through yesterday’s session, surging through the first half of the session amidst a prevailing risk-off mood.
However, the ‘Greenback’ shed some of these gains later in the day after the latest US retail sales figures printed well below expectations, reporting sales growth contracted 3% in February.
Coming up, the spotlight today will be on the Federal Reserve’s latest policy meeting, in which the bank is widely expected to keep interest rates on hold.
This leaves the focus on the Fed’s accompanying policy statement. Will the Fed’s ongoing dovish bias undermine the US Dollar, or will the bank’s reluctance to address the recent surge in yields set up USD for further gains?
Canadian Dollar (CAD) Muted as Oil Prices Slip
The Canadian Dollar (CAD) was mostly rangebound on Tuesday as the appeal of the oil-sensitive ‘Loonie’ was dampened by another drop in WTI crude.
Turning to today’s session, the Canadian Dollar could attract some investors later this afternoon as Canada’s latest CPI figures are expected to report a bump in domestic inflation last month.
Australian Dollar (AUD) Dips as Market Sentiment Weakens
The Australian Dollar (AUD) ticked lower overnight on Tuesday, with investors steering clear of the risk sensitive ‘Aussie’ as US tensions with North Korea and new sanctions on Russia unnerved investors.
New Zealand Dollar (NZD) Undermined by Risk-Off Trade
The New Zealand Dollar (NZD) also weakened in overnight trade, with the ‘Kiwi’ suffering a similar fate to the Australian Dollar as skittish investors shunned higher-risk currencies.
Data Releases
10:00 EUR Inflation Rate (Feb)
12:30 CAD Inflation Rate (Feb)
18:00 USD Fed Rate Decision