Pound (GBP) Recovers amid Bargain-Hunting
The Pound (GBP) managed to firm yesterday, recovering some of its losses from Wednesday’s slump after the UK announced it would look to implement its Covid Plan B.
The upside seems to have been caused primarily by weaknesses in other currencies and bargain-hunting among investors.
Turning to today, the latest UK GDP report missed forecasts this morning. October’s growth came in at 0.1% versus expectations of 0.4%. As a result, Sterling may struggle.
Euro (EUR) Subdued on German Trade Data
The Euro (EUR) was muted yesterday after Germany’s trade surplus unexpectedly narrowed in October, fuelling ongoing concern about the recovery in Europe’s largest economy.
Further headwinds hit the single currency in the afternoon following some strong US data, which saw EUR suffer from its negative correlation to a strengthening US Dollar (USD).
A speech from European Central Bank (ECB) President Christine Lagarde this morning could impact the Euro. Later on, the US CPI could trigger another selloff in EUR.
US Dollar (USD) Up as Market Sentiment Sours
The US Dollar (USD) enjoyed a turnaround in risk sentiment yesterday amid new Covid measures in the UK, geopolitical tensions, and renewed concerns over indebted Chinese property giant Evergrande.
The ‘Greenback’ also benefitted from the latest US initial jobless claims figure, which hit its lowest level in over 50 years.
USD could extend its gains today on the US CPI release. Economists expect inflation to jump to 6.8%, which would be a near 40-year high. Such a reading would further boost Federal Reserve rate hike bets.
Canadian Dollar (CAD) Wobbly as Oil Prices Slip
The commodity-linked Canadian Dollar (CAD) struggled for direction yesterday, softening against its stronger peers, as the oil price rally came to an end.
With no Canadian data due out today, movements in USD and oil prices could exert the most influence over CAD exchange rates.
Australian Dollar (AUD) Flat amid Tepid Market Mood
The Australian Dollar (AUD) was mostly rangebound overnight as a mixed market mood left the risk-sensitive ‘Aussie’ without a clear direction.
New Zealand Dollar (NZD) Falls as PMI Misses Forecasts
The New Zealand Dollar (NZD) stumbled in overnight trade after New Zealand’s latest manufacturing PMI unexpectedly decreased to near stagnation.