Pound (GBP) Mixed on Brexit Optimism and Energy Concerns
The Pound (GBP) firmed against the Euro (EUR) and the US Dollar (USD) yesterday, but weakened against its riskier rivals, as an upbeat market mood and optimism around the EU’s offer to reduce checks on goods entering Northern Ireland boosted Sterling.
The upside was offset somewhat amid renewed concerns that soaring gas prices could cause factories to close this winter.
With no UK data due out today, domestic headlines around Brexit and the UK economy could be the main drivers of GBP movement.
Euro (EUR) Founders in Absence of Data
The Euro (EUR) slipped during yesterday’s session, hitting multi-month lows against many of its peers, as a lack of Eurozone data left the single currency vulnerable to losses.
The continued dovish approach from the European Central Bank (ECB) may have contributed to EUR’s downside, with ECB official Andrea Enria urging caution amid risks to the Eurozone’s recovery.
Turning to today, the Eurozone’s trade surplus is expected to have narrowed from €20.7bn in July to €16.1bn in August. If the figures meet forecasts, the single currency may dip further.
US Dollar (USD) Bounces Off Lows following Upbeat Jobs Data
The US Dollar (USD) initially fell yesterday amid a risk-on market mood, but managed to recoup some losses in the afternoon following the latest initial jobless claims from the US.
New unemployment benefits claims fell to 293,000 last week, the lowest level since the pandemic hit the US. This recovery in employment supports the Federal Reserve’s decision to tighten monetary policy.
Looking ahead, US retail sales in September are forecast to have contracted by 0.2%, which may dent the US Dollar.
Canadian Dollar (CAD) Strengthens on Rising Oil Prices
The Canadian Dollar (CAD) firmed yesterday as the oil-sensitive ‘Loonie’ was boosted by rising crude prices.
With oil looking like it could climb further today, CAD exchange rates may continue to make gains.
Australian Dollar (AUD) Slips after Trading Steady Overnight
The Australian Dollar (AUD) was rangebound for most of the overnight session but dropped off sharply this morning, with no clear catalyst for the movement.
New Zealand Dollar (NZD) Firms amid Risk-On Mood
The New Zealand Dollar (NZD) ticked higher in overnight trade as an upbeat market mood supported the risk-sensitive ‘Kiwi’.