Pound (GBP) Wavers amid Lack of Data
The Pound (GBP) wobbled yesterday, as a lack of UK data and a risk-off mood left Sterling vulnerable to losses.
However, tailwinds from Friday’s GDP data and Bank of England (BoE) rate hike expectations prevented any significant losses.
This morning’s mixed UK jobs data could cause Sterling to waver. The UK’s unemployment rate held at 4.1% while the number of Britons in work fell by 39,000. In addition, the latest earnings data confirms inflation continues to outpace wage growth.
Euro (EUR) Slips amid Fears of a Russian Invasion
The Euro (EUR) was on the back foot yesterday as investors feared the economic fallout of a Russian invasion of Ukraine.
An invasion would likely hit European stock markets, sow geopolitical discord, raise energy prices and hurt European banks, all of which could slow economic growth in the Eurozone.
Looking ahead, Germany’s ZEW economic sentiment index is forecast to rise, which may support the Euro. However, a widening of the Eurozone trade surplus could offset any upside.
US Dollar (USD) Gains as Sentiment Sours
The US Dollar (USD) gained against many of its rivals on Monday as a risk-off market mood increased demand for the safe-haven currency.
In the afternoon, Russian Foreign Minister Sergei Lavrov advised Vladimir Putin to continue with diplomacy. This eased fears of an imminent invasion, capping USD’s gains somewhat.
Risk sentiment could continue to drive USD exchange rates today. Reports say that Russian troops are returning to bases. Could this be a de-escalation?
Canadian Dollar (CAD) Mixed amid Oil Volatility
The Canadian Dollar (CAD) was mixed yesterday as fluctuations in the oil market affected the commodity-linked ‘Loonie’.
There’s no Canadian data due to be published today. As a result, movements in the oil market could continue to drive the Canadian Dollar.
Australian Dollar (AUD) Rebounds as Risk Appetite Improves
The Australian Dollar (AUD) dipped overnight following a tepid tone in the Reserve Bank of Australia (RBA) meeting minutes and a risk-off mood. However, the apparent pullback of Russian forces has cheered investors, sending the risk-sensitive ‘Aussie’ higher this morning.
New Zealand Dollar (NZD) Recovers as Investor Confidence Returns
The New Zealand Dollar (NZD) also initially fell overnight, but the turnaround in risk sentiment boosted the riskier ‘Kiwi’ through the last few hours of Asian trading.