Pound (GBP) Firms as Markets Move on from BoE Decision
The Pound (GBP) initially dipped yesterday but managed to bounce back in the afternoon without a clear catalyst for the movement.
Sterling’s strength could have been a technical correction as traders repositioned after last week’s disappointing Bank of England (BoE) decision. Meanwhile, UK government bond yields recovered, which may also have lent support to the Pound.
With public sector borrowing higher than expected ahead of tomorrow’s spring budget, GBP may face headwinds today.
Euro (EUR) Edges Lower as Energy Prices Climb
The Euro (EUR) softened yesterday as rising energy prices worried EUR investors, with some EU countries considering an embargo on Russian oil.
With the Eurozone heavily reliant on energy exports from Russia, higher prices and sanctions on imports could cause further economic pain in the bloc.
European Central Bank (ECB) President Christine Lagarde is due to speak this afternoon. Her comments could have an impact on EUR exchange rates.
US Dollar (USD) Subdued amid Lukewarm Market Mood
The US Dollar (USD) edged lower against many of its peers yesterday as a moderately upbeat market mood dampened demand for the safe-haven USD.
Hawkish comments from Federal Reserve officials may have underpinned the ‘Greenback’ and limited losses. Policymakers signalled their support for an increasingly aggressive pace of tightening.
Turning to today, USD could once again trade on risk sentiment and speeches from Fed officials.
Canadian Dollar (CAD) Wavers amid Lack of Data
The Canadian Dollar (CAD) was mixed yesterday as a lack of Canadian data left it to trade without a clear direction. However, a modest uptick in oil prices buoyed the commodity-linked ‘Loonie’ and limited losses.
Canada’s latest PPI could affect the Canadian Dollar today as rising price pressures could prompt more aggressive action from the Bank of Canada (BoC).
Australian Dollar (AUD) Wobbles on Dovish RBA and Risk-On Mood
The Australian Dollar (AUD) wavered overnight, heading sideways overall, as dovish comments from the Reserve Bank of Australia (RBA) Governor Philip Lowe offset the upbeat market mood.
New Zealand Dollar (NZD) Flickers on Mixed NZD Sentiment
Likewise, the New Zealand Dollar (NZD) found itself caught between two opposing forces. A risk-on sentiment supported the ‘Kiwi’ while an unexpected slump in New Zealand consumer confidence pressured the currency.