Pound (GBP) Stumbles as Russia-Ukraine Talks End in Impasse
The Pound (GBP) fell yesterday as sentiment in Europe soured following failed diplomatic talks.
Markets had high hopes for a trilateral meeting of the foreign ministers from Ukraine, Russia and Turkey. However, the discussions ended in an impasse with the Russian and Ukrainian diplomats sounding rather downbeat.
This morning’s GDP data for January came in stronger than expected, which could support the Pound. But news from Ukraine could eclipse the upbeat economic data.
Euro (EUR) Slips despite Hawkish ECB
The Euro (EUR) also stumbled yesterday amid the diplomatic deadlock between Ukraine and Russia and the worsening situation in the besieged port of Mariupol.
A hawkish move from the European Central Bank (ECB) saw EUR briefly spike, as the bank sped up its tapering of asset purchases.
However, a stronger US Dollar (USD) and waning risk appetite saw the single currency quickly shed its gains.
With no Eurozone data due out for the rest of today’s session, the Ukraine crisis will likely remain the primary influence over EUR exchange rates.
US Dollar (USD) Subdued despite Souring Market Sentiment
The safe-haven US Dollar (USD) was mixed yesterday, heading higher against its weaker rivals amid the risk-off market mood.
The US CPI also bolstered USD, hitting a fresh 40-year high, as expected. However, this wasn’t enough to push the ‘Greenback’ higher against many of its stronger peers.
This afternoon, the latest consumer sentiment report from the University of Michigan could influence USD. Will morale drop to another ten-year low?
Canadian Dollar (CAD) Mixed as Oil Prices Waver
The oil-sensitive Canadian Dollar (CAD) initially edged higher as crude rallied yesterday, but it lost most of its gains amid a pullback in oil prices in the afternoon.
Later today, forecasters expect new jobs data to show a rebound in the Canadian labour market. This could bolster the ‘Loonie’.
Australian Dollar (AUD) Falls as Russia Fears Grow
The risk-sensitive Australian Dollar (AUD) stumbled overnight as analysts fear an escalation in the Russia-Ukraine war, which rattled markets.
New Zealand Dollar (NZD) Slips amid Risk-Off Trade
The New Zealand Dollar (NZD) also fell overnight, despite the New Zealand business PMI beating expectations, as the prevailing risk-off mood dented the riskier ‘Kiwi’.