Pound (GBP) Drops on Dovish BoE Comments
The Pound (GBP) dropped sharply on Friday afternoon following some dovish comments from Bank of England (BoE) official Michael Saunders.
Saunders, who voted to hike rates at the last meeting, said that the bank would need more data on Omicron before tightening monetary policy. As one of the more hawkish policymakers at the BoE, Saunders’ cautious comments particularly dented GBP.
Today we have a speech from the BoE’s Ben Broadbent. If he also expresses concern, Sterling could fall further.
Euro (EUR) Firms on Strong Economic Reports
The Euro (EUR) fluctuated on Friday but gained ground overall thanks to some positive economic data.
The November composite PMI showed that growth in the Eurozone accelerated for the first time in fourth months. In addition, retail sales in the bloc recovered in October, growing by 0.2%.
The single currency is off to a rocky start this morning after German factory orders slumped by 6.9%, far worse than forecasts of a 0.5% fall.
US Dollar (USD) Climbs despite Mixed Data
The US Dollar (USD) strengthened against most of its rivals at the end of last week’s trade, despite the US non-farm payrolls report printing well below expectations.
Fortunately for the ‘Greenback’, the US unemployment rate dropped by a massive 0.3 percentage points while the ISM services PMI smashed forecasts to unexpectedly rise.
With a lack of US data today, the safe-haven US Dollar may be particularly sensitive to shifts in risk appetite.
Canadian Dollar (CAD) Spikes on Strong Jobs Data
The Canadian Dollar (CAD) spiked on Friday following stellar employment data. Canada’s unemployment rate dropped from 6.7% to 6%, beating forecasts of 6.6%. In addition, the employment change figures printed five times higher than forecast.
However, CAD was unable to hold these gains against most of its peers after the US Dollar regained its strength.
With Canadian data thin on the ground, crude prices may be the primary influence on CAD exchange rates today.
Australian Dollar (AUD) Ticks Higher amid Risk-On Market Mood
The Australian Dollar (AUD) edged higher in overnight trade as a bullish market sentiment boosted the risk-sensitive ‘Aussie’.
New Zealand Dollar (NZD) Rangebound despite Upbeat Trade
The New Zealand Dollar (NZD) traded mostly sidewise overnight as the riskier ‘Kiwi’ struggled to benefit from a slightly more upbeat market mood.