Pound (GBP) Slips as Leadership Challenge Looms for Boris Johnson
The Pound (GBP) fell against many of its rivals yesterday as political jitters weighed on Sterling. Boris Johnson faced calls to resign from both sides of the Commons after admitting he attended a potentially illegal gathering during the first Covid lockdown.
In addition, Brexit anxiety may also have played against the Pound, as crunch talks over the Northern Ireland protocol are set to resume this week.
With UK data still thin on the ground, headlines on Brexit, Covid and Boris Johnson’s premiership may keep GBP investors occupied today.
Euro (EUR) Boosted by Dip in USD
The Euro (EUR) firmed against its weaker rivals yesterday as a sharp drop in the US Dollar (USD) benefitted the single currency due to the negative correlation between the two.
However, a risk-on market mood capped gains for the safe-haven Euro.
Turning to today, a lack of Eurozone data could leave the single currency open to losses.
US Dollar (USD) Slumps despite CPI Hitting 7%
The US Dollar tumbled to two-month lows yesterday, despite US inflation jumping to a near 40-year high. It seems as though markets had already priced in the inflation rate reading – with some investors perhaps hoping it would print above forecast – so USD slipped.
A risk-on mood added to the downside as traders shunned the safe-haven ‘Greenback’ for riskier, higher-yielding currencies.
A number of Federal Reserve speeches today could help to bolster the US Dollar. If officials strike a more hawkish tone than Fed Chair Jerome Powell did on Tuesday then USD might regain some ground.
Canadian Dollar (CAD) Firms as Oil Rally Continues
The oil-sensitive Canadian Dollar (CAD) rose against all but its riskier peers yesterday as crude prices continued to climb.
If oil can sustain its rally through today’s session, the ‘Loonie’ might make further gains.
Australian Dollar (AUD) Flat on Covid Concerns
The Australian Dollar (AUD) was fairly rangebound overnight as concerns about Australia’s Covid situation offset a slight improvement in market mood.
New Zealand Dollar (NZD) Ticks Higher in Risk-Positive Trade
The New Zealand Dollar (NZD) gained ground in overnight trade as the risk-sensitive ‘Kiwi’ enjoyed a more upbeat sentiment among investors.