Pound (GBP) Mixed amid BoE Rate Hike Bets and Political Jitters
The Pound (GBP) was mixed yesterday, performing better than safe-haven currencies but slipping against its riskier rivals amid an upbeat market mood.
While Bank of England (BoE) rate hike bets supported the Pound, the ongoing political turmoil in the UK offset the upside.
This morning, Sterling has tumbled on poor retail sales data. Sales slumped by 3.7% in December – much worse than the 0.6% contraction expected. GBP investors may be hopeful that a speech from BoE policymaker Catherine Mann later this afternoon could bolster the Pound.
Euro (EUR) Stumbles in Risk-On Trade
The Euro (EUR) lost ground during yesterday’s session as a risk-on market mood dented the perceived safer single currency.
Central bank policy divergence also weighed on EUR. The latest European Central Bank (ECB) meeting minutes confirmed that the bank does not expect to hike rates in 2022.
Two ECB speeches today could add to the Euro’s downside if policymakers remain dovish. Additionally, economists expect Eurozone consumer confidence to have dropped for a fourth consecutive month, which could also hurt EUR.
US Dollar (USD) Dips as Risk Appetite Improves
The safe-haven US Dollar (USD) fell against the majority of its peers on Wednesday, as a bullish tone saw investors shun USD for higher-yielding currencies.
An unexpected rise in jobless claims also weighed on the ‘Greenback’, as Omicron hit the US economy.
Looking ahead, a lack of noteworthy US data today could mean that risk sentiment continues to drive movement in the US Dollar.
Canadian Dollar (CAD) Edges Up as Oil Prices Continue to Rise
The Canadian Dollar (CAD) firmed against many of its peers yesterday as a rise in crude prices boosted the oil-sensitive currency.
With Canadian retail sales expected to have risen in November, CAD could catch some bids later today.
Australian Dollar (AUD) Drops as Risk Appetite Evaporates
The Australian Dollar (AUD) fell in overnight trade, shedding yesterday’s gains, as a souring market sentiment dented the risk-sensitive ‘Aussie’.
New Zealand Dollar (NZD) Falls as Markets Cloud Over
The New Zealand Dollar (NZD) also slid overnight, despite a better-than-expected manufacturing PMI, as the bearish mood and Covid woes weighed on the riskier ‘Kiwi’.