Pound (GBP) Slips as UK Energy Fears Worsen
The Pound (GBP) slumped against the Euro (EUR) and the US Dollar (USD) yesterday afternoon, but managed to hold strong against its other rivals, as worries over the UK’s energy crisis grew.
In the latest development of the worsening gas crunch, rising gas prices forced two UK fertiliser plants to close as production has become unprofitable, with concerns that more closures could follow denting Sterling.
Turning to today, the Pound may face some headwinds this morning as retail sales unexpectedly fell in August, printing at -0.9% versus the 0.5% rise predicted.
Euro (EUR) Bounces Back on Rate Hike Expectations
The Euro initially stumbled yesterday amid a stronger US Dollar and a below-expected balance of trade report.
However, it managed to recover in the afternoon after an unpublished inflation estimation from the European Central Bank (ECB) raised prospects of a rate hike in just over two years.
Looking ahead, the Eurozone’s finalised inflation figures today aren’t expected to change, but any surprises could drive some movement in EUR exchange rates.
US Dollar (USD) Rallies as Market Sentiment Sours
The US Dollar soared during yesterday’s session, as a decreased appetite for risk boosted the appeal of the safe-haven currency.
A surprise rise in retail sales also lent USD some support, with domestic sales rising 0.7% rather than the 0.8% decline that analysts expected.
This afternoon, the University of Michigan’s consumer sentiment gauge is expected to rise slightly but remain at some of the lowest levels for over a decade, which may dent USD.
Canadian Dollar (CAD) Subdued on USD Strength
The Canadian Dollar (CAD) was muted through yesterday’s session amid a slight dip in oil prices and a strengthening US Dollar.
With no Canadian data out today, CAD exchange rates could be primarily driven by the price of oil.
Australian Dollar (AUD) Firms on Upbeat Market Mood
The Australian Dollar (AUD) ticked higher in overnight trade as a slight recovery in risk appetite boosted AUD demand.
New Zealand Dollar (NZD) Gains Capped by Poor PMI
The New Zealand Dollar (NZD) also trended higher overnight amid the bullish market mood but its gains were potentially capped by a worse-than-expected PMI.