Pound (GBP) Drifts amid Lull in Economic Data
The Pound (GBP) had mixed success during yesterday’s session as a lack of data left Sterling without a clear direction.
Omicron news was also mixed, which added to the Pound’s lack of energy. While UK Covid cases have started falling in recent days, they still remain worryingly high.
With no major economic releases from the UK today, domestic Covid and business news will likely play a key role in GBP exchange rates.
Euro (EUR) Firms amid Risk-Off Market Mood
The Euro (EUR) strengthened against its riskier rivals yesterday, as a souring market sentiment acted as a tailwind for the safe-haven currency.
A drop in Eurozone unemployment also worked in EUR’s favour. However, the single currency’s gains were capped by its strong negative correlation to a rising US Dollar (USD).
EUR investors will be looking to a speech from European Central Bank (ECB) President Christine Lagarde later this morning for fresh impetus. If Lagarde maintains her dovish stance, the Euro could suffer.
US Dollar (USD) Gains as Fed Expectations Spook Markets
The US Dollar (USD) strengthened yesterday as markets fretted about aggressive policy action from the Federal Reserve, draining investors’ appetite for risk and thereby supporting the safe-haven US Dollar.
With inflation proving far stickier than central bankers anticipated, economists expect the Fed to start hiking rates soon. The International Monetary Fund (IMF) issued a warning that a rate rise would rattle global markets and hit emerging-market economies.
Fed Chair Jerome Powell will testify before the US Senate this afternoon. Hawkish signals from the Fed chief could further boost USD.
Canadian Dollar (CAD) Ticks Lower as Oil Markets Stumble
The oil-sensitive Canadian Dollar (CAD) softened against most of its counterparts yesterday as crude prices dropped amid choppy trade.
With no Canadian data due out today, movements in the oil market may continue to drive CAD exchange rates.
Australian Dollar (AUD) Wobbles on Mixed Data
The Australian Dollar (AUD) wavered overnight following some mixed Australian data. The country’s trade surplus narrowed by more than expected, while retail sales smashed forecasts.
New Zealand Dollar (NZD) Flat amid Neutral Market Mood
The New Zealand Dollar (NZD) also traded sideways overnight due to its positive correlation to the ‘Aussie’ and a tepid risk appetite.