Pound (GBP) Wavers amid Strong PMI and Russia-Ukraine Worries
The Pound (GBP) initially rose yesterday after the UK’s services PMI smashed forecasts, rising from 54.1 to 60.8, much higher than the expected 55.5.
However, with Russia on the brink of invading Ukraine, the prospect of war in Europe weighed on Sterling. GBP lost its gains in the afternoon.
A speech from Bank of England (BoE) Deputy Governor Dave Ramsden could boost Sterling later this morning. As one of the BoE’s more hawkish policymakers, Ramsden’s comments may fuel rate hike bets.
Euro (EUR) Slips as Russia ‘Poised’ to Invade
The Euro (EUR) weakened during yesterday’s trade as the Russia-Ukraine crisis reached boiling point, overshadowing the Eurozone’s strong services PMI.
Following an eventful day, which included Russian claims of a Ukrainian attack on Russian soil, analysts believed that Putin was poised to invade Ukraine.
Overnight, Putin ordered Russian troops into eastern Ukraine after recognising the two breakaway states. This could weigh on the Euro during today’s session.
US Dollar (USD) Firms in Cautious Trade
The US Dollar (USD) gained against most of its rivals yesterday as the prevailing risk-off market mood boosted the appeal of the safe-haven ‘Greenback’.
However, the closure of US markets for President’s Day prompted thin trading conditions and limited USD’s upside.
Risk appetite could drive the US Dollar through the first part of today’s session, while the US Markit PMIs may cause some movement later in the afternoon.
Canadian Dollar (CAD) Wobbles amid Oil Volatility
The commodity-linked Canadian Dollar (CAD) wavered during yesterday’s trade amid volatility in the oil market. Crude edged higher, recovering most of its losses after an overnight slump.
Oil prices are up this morning following the escalation in the Russia-Ukraine crisis. This could support CAD exchange rates today.
Australian Dollar (AUD) Climbs on RBA Rate Hike Bets
The Australian Dollar (AUD) wavered higher overnight, despite the risk-off mood, as bets for a Reserve Bank of Australia (RBA) rate rise underpinned the ‘Aussie’.
New Zealand Dollar (NZD) Firms ahead of RBNZ Decision
The New Zealand Dollar (NZD) also gained ground in overnight trade as investors prepare for a third consecutive rate hike from the Reserve Bank of New Zealand (RBNZ) at tomorrow’s meeting.