Pound (GBP) Gains on UK Employment Report
The Pound (GBP) fluctuated yesterday but managed to gain ground overall as the latest UK jobs data showed a continued recovery in the post-furlough labour market.
However, concerns that the rapidly spreading Omicron variant could derail the UK’s economic recovery weighed on the Pound, limiting its gains.
UK inflation beat forecasts this morning, which may boost the Pound. However, with the Bank of England (BoE) unlikely to hike rates, any gains may be hard to sustain.
Euro (EUR) See-Saws on Volatile USD
The Euro (EUR) spiked early in yesterday’s session, only to slide back down as we entered the afternoon. The movement was seemingly in relation to the US Dollar (USD), as the two currencies are negatively correlated.
However, mixed sentiment around the Euro may have also contributed to the fluctuation. Although industrial production in the Eurozone recovered in October, the IFO institute slashed its German growth forecasts for 2022.
EUR investors may be jittery today as the Federal Reserve’s interest rate decision looms over markets.
US Dollar (USD) Fluctuates as Traders Reposition ahead of Fed
The US Dollar (USD) experienced some volatility yesterday as markets repositioned ahead of the Fed’s interest rate decision.
Shifts in global risk sentiment also likely affected the safe-haven currency. Although Omicron appears less severe in early South African data, some experts are questioning whether this can be extrapolated to other countries.
US retail sales could affect the ‘Greenback’ today, however investors will be focused on the Fed decision. With the bank expected to accelerate its tapering plans, USD could climb.
Canadian Dollar (CAD) Falls as IEA Cuts Oil Demand Forecast
The commodity-linked Canadian Dollar (CAD) stumbled yesterday as the International Energy Agency (IEA) trimmed its oil demand forecast, causing crude prices to dip.
Turning to today, Canadian inflation is forecast to hold at 4.7%. If it prints higher, CAD could catch some bids. However, movement may be limited ahead of the Fed decision.
Australian Dollar (AUD) Firms as Borders Reopen
The Australian Dollar (AUD) ticked higher in overnight trade, despite Australian consumer confidence unexpectedly falling, as Australia reopened its borders to vaccinated students and skilled migrants.
New Zealand Dollar (NZD) Wobbles amid Jittery Trade
The New Zealand Dollar (NZD) wavered overnight as markets remain jumpy amid the new wave of the Omicron variant and the upcoming Federal Reserve decision.