Pound (GBP) Trades Sideways on Poor GDP
The Pound (GBP) fluctuated on Friday, trading sideways overall against many of its peers amid a fairly disappointing GDP release.
UK GDP printed at 0.1% in July, leading some economists to believe that the economy has stalled. Others said it was merely a blip following June’s 1% expansion and expected better growth for the rest of the year.
With no UK data due out today, GBP exchange rates could be affected by the ongoing Brexit dispute over Northern Ireland, which has escalated in recent days.
Euro (EUR) Mixed as Markets Digest ECB
The Euro (EUR) had a mixed session on Friday, slipping against the US Dollar (USD) but beating many of its other rivals.
The upside came as markets continued to digest the European Central Bank’s (ECB) decision to slow the pace of pandemic-era bond-buying. The central bank also lifted growth and inflation forecasts for the remainder of this year.
Turning to today, the Euro seems subdued this morning amid a stronger US Dollar, which is weighing on the single currency by way of the USD/EUR negative correlation.
US Dollar (USD) Firms as Market Sentiment Sours
The US Dollar (USD) strengthened through Friday’s session, as rising US Treasury yields boosted the ‘Greenback’.
The safe-haven currency was also supported by a risk-off mood as concerns over inflation, growth and the winding down of crisis-era stimulus packages worried markets.
With no US data due out today, market sentiment could be a dominant factor in USD exchange rates, with a continued bearish market mood boosting the US Dollar.
Canadian Dollar (CAD) Slips despite Strong Tailwinds
The Canadian Dollar (CAD) initially climbed yesterday but then slipped in the afternoon, despite a fairly strong jobs report and a steady rise in the price of oil.
CAD’s downside seems to be due to its negative correlation with the US Dollar, which strengthened through Friday afternoon.
Looking ahead, CAD may be muted today if continued USD strength remains offset by steady oil prices.
Australian Dollar (AUD) Down amid Cautious Trade
The Australian Dollar (AUD) dipped against most of its peers overnight as a bearish market mood weighed on the risk-sensitive ‘Aussie’.
New Zealand Dollar (NZD) Muted amid Risk-Off Mood
The New Zealand Dollar (NZD) was fairly subdued in overnight trade as the prevailing risk-off market mood dampened demand for the ‘Kiwi’.