Pound (GBP) Softens in Absence of Data
The Pound (GBP) slipped during yesterday’s session as a lack of UK economic data left Sterling open to losses.
In addition, cost-of-living concerns continued to act as a headwind for GBP. The EY Item Club cut its UK growth forecast for this year as it expects rising inflation and the squeeze on disposable income to slow the UK’s economic recovery.
With UK data still thin on the ground today, domestic political and economic headlines could drive most movement in the Pound.
Euro (EUR) Quiet as Investors Await ECB’s Lagarde
The Euro (EUR) traded in a narrow range yesterday as EUR investors awaited a speech by European Central Bank (ECB) President Christine Lagarde towards the end of the session.
Lagarde’s hawkish shift last week sent the Euro soaring, but yesterday she struck a slightly more cautious tone. As a result, the single currency remained muted.
In the absence of any notable Eurozone data, EUR may be susceptible to its negative correlation with the US Dollar (USD) today.
US Dollar (USD) Muted in Risk-Positive Trade
The safe-haven US Dollar was subdued yesterday as the market mood remained modestly upbeat.
However, rising US Treasury yields gave the ‘Greenback’ some support, with USD holding its own its weaker rivals.
The latest IBD/TIPP economic optimism index this afternoon could cause some movement in the US Dollar. Economists expect the indicator to have edged up this month, which may support USD.
Canadian Dollar (CAD) Firms as Oil Holds Near Highs
The oil-sensitive Canadian Dollar (CAD) strengthened yesterday as WTI crude wavered above $91 a barrel, close to the multi-year high hit on Friday.
Looking ahead, economists expect Canada’s trade surplus to have widened in December. This could boost the commodity-linked ‘Loonie’.
Australian Dollar (AUD) Undermined by Risk-Off Sentiment
The Australian Dollar (AUD) wavered overnight as an unexpectedly upbeat business confidence report and a bearish market mood pulled the ‘Aussie’ in different directions.
New Zealand Dollar (NZD) Firms despite Bearish Sentiment
The New Zealand Dollar (NZD) managed to tick higher in overnight trade, though market jitters amid the ongoing Ukraine crisis limited NZD’s gains.