Pound (GBP) Slips following BoE Broadbent Comments
The Pound (GBP) initially firmed yesterday after the UK’s construction PMI unexpectedly rose, with the fastest increase in purchasing for three months as the sector continued to recover.
However, comments from Bank of England (BoE) policymaker Ben Broadbent dented Sterling in the afternoon, as he expressed concerns about the UK’s ‘extremely challenging period for monetary policy’.
With a lack of UK data out today, GBP investors may be focused on domestic UK news.
Euro (EUR) Weakens on Dire German Factory Orders
The Euro (EUR) lost ground against the majority of its rivals yesterday after German factory orders fell far more than forecast.
October’s factory orders in Europe’s largest economy contracted by 6.9%, compared to predictions of -0.5%.
The ZEW economic sentiment index for Germany later this morning could see EUR drop further. Analysts expect the index to fall back to one of the lowest levels since the pandemic began.
US Dollar (USD) Softens amid Upbeat Market Mood
The US Dollar (USD) edged down against many of its rivals during yesterday’s session as a risk-on market mood chipped away at demand for the safe-haven currency.
The cheery sentiment came amid reports that the Omicron variant produces fairly mild symptoms, while White House chief medical adviser Dr Anthony Fauci said that the preliminary data is ‘a bit encouraging’.
Investors remain upbeat today, so the US Dollar could continue to soften this morning.
Canadian Dollar (CAD) Climbs on Rising Oil Prices
The oil-sensitive Canadian Dollar (CAD) caught some bids yesterday as crude prices rallied amid the cheery market mood.
Today’s balance of trade figures and Ivey PMI could cause some movement in the ‘Loonie’, particularly if they surprise investors.
Australian Dollar (AUD) Jumps following RBA Policy Decision
The Australian Dollar (AUD) strengthened overnight as the Reserve Bank of Australia (RBA) hinted that bond-buying would end in February, paving the way for a potential rate hike in July.
In addition, unexpectedly strong growth in Chinese imports and exports have given the ‘Aussie’ a boost, while adding to the bullish trading environment.
New Zealand Dollar (NZD) Firms as Risk Appetite Improves
The New Zealand Dollar (NZD) also climbed in overnight trade, with the risk-sensitive ‘Kiwi’ enjoying the positive market sentiment.