Pound (GBP) Dented as More Energy Firms Fold
The Pound (GBP) continued falling against most of its major rivals yesterday as the UK’s economic woes continue.
While forecourt fuel supplies are showing signs of stabilising, the energy crisis caused another three energy firms to fold, bringing the total up to 12 this year, thereby denting Sterling.
Looking ahead, this morning’s finalised GDP growth and business investment figures were both revised higher. However, this may be offset by warnings of stagflation as the UK’s economic recovery seems to falter.
Euro (EUR) Mixed despite Rising Economic Sentiment
The Euro (EUR) slumped against the US Dollar (USD) yesterday, hitting a 14-month low, but gained on most of its other peers after economic sentiment in the Eurozone unexpectedly rose.
The single currency may have been capped by the European Central Bank’s (ECB) dovish stance, which ECB President Christine Lagarde has reiterated in recent days.
Turning to today, unemployment is expected to have dropped in both Germany and the wider Eurozone, which could support the Euro. However, German’s CPI is expected to hit 4.2%. With inflation fears growing, this could cause some nervousness among EUR investors.
US Dollar (USD) Soars amid Gloomy Market Mood
The US Dollar (USD) continued its ascent to multi-month highs yesterday, as global economic concerns fuelled demand for the safe-haven currency.
With energy crises in Europe and China, stagflation fears, and the potential of a debt default by the US as Senate Republicans block attempts to raise the borrowing limit, markets were extremely nervous yesterday.
If risk appetite remains low today, the ‘Greenback’ could climb further. USD investors will also be looking to the final GDP growth figures and latest initial jobless claims from the US this afternoon for fresh impetus.
Canadian Dollar (CAD) Holds Firm as Oil Trades Near Seven-Year Highs
The Canadian Dollar (CAD) made some modest gains yesterday, as oil prices wavered in a narrow range at some of their highest levels in seven years.
If oil prices hold strong today, the commodity-linked ‘Loonie’ could firm.
Australian Dollar (AUD) Ticks Higher on Positive Data
The Australian Dollar (AUD) gained ground overnight as both Australia’s building permits data and China’s manufacturing PMI printed above expectations.
New Zealand Dollar (NZD) Undermined by Business Confidence Miss
The New Zealand Dollar (NZD) edged slightly higher in overnight trade, as the upside from its positive correlation with AUD was offset by lower-than-expected business confidence.