Pound Jumps as UK Unveils £9.7bn in Investment

Pound (GBP) Strengthens as UK Announces Foreign Investment Deals

The Pound (GBP) initially surged yesterday as the UK’s Global Investment Summit got underway, with Boris Johnson announcing £9.7bn of foreign investment in green industries.

However, Sterling lost some of these gains in the afternoon due to a market correction and warnings from the Treasury that the UK’s net zero strategy will hit the public purse.

Turning to today, the UK’s CPI fell from 3.2% to 3.1%, below expectations. Some GBP investors may be disappointed by the result, so the Pound could be somewhat muted this morning.

Euro (EUR) Dips as Construction Output Contracts

The Euro (EUR) initially firmed yesterday but then dropped against most of its rivals after construction output in the Eurozone unexpectedly contracted, printing at -1.6% versus the 2.5% forecast.

The single currency was also dragged down by dovish comments from multiple European Central Bank (ECB) officials, who reiterated their view that inflation is transitory and that a rate hike is not imminent.

The Eurozone’s finalised CPI is unlikely to cause much movement, unless the results surprise investors. Otherwise, a lack of data may leave EUR without a clear direction today.

US Dollar (USD) Muted amid Risk-On Trade

The US Dollar (USD) fell through the beginning of yesterday’s session as a buoyant market mood limited the appeal of the ‘Greenback’.

However, USD managed to recoup some of its losses in the afternoon as market sentiment calmed, allowing the US Dollar to edge up against some of its weakening rivals.

With no major market-moving data from the US due out today, risk appetite may continue to determine the direction of USD exchange rates.

Canadian Dollar (CAD) Ticks Lower as Oil Prices Ease

The Canadian Dollar (CAD) softened through yesterday’s session, as a modest dip in oil prices dented the commodity-linked ‘Loonie’.

Looking ahead, Canada’s inflation rate is expected to climb to a fresh 18-year high of 4.3%. A strong reading may boost CAD by putting pressure on the Bank of Canada (BoC) to rethink its approach to monetary policy.

Australian Dollar (AUD) Climbs amid Upbeat Market Mood

The Australian Dollar (AUD) firmed overnight, as rising commodities prices and a bullish market mood supported the risk-sensitive ‘Aussie’.

New Zealand Dollar (NZD) Firms as Risk Appetite Increases

The New Zealand Dollar (NZD) also trended higher in overnight trade, as the prevailing risk-on sentiment boosted the perceived riskier ‘Kiwi’.

Samuel Birnie

Contact Samuel Birnie