Pound (GBP) Slips as Concerns Grow over Income Squeeze
The Pound (GBP) wavered lower yesterday as investors remained concerned over the UK’s growing cost-of-living crisis. Commentators continued to give their thoughts on Rishi Sunak’s spring statement, with many warning that it does not go far enough to support struggling households and businesses.
An unexpected rise in the UK services PMI may have given Sterling some support. However, the PMI came with caveats as business optimism slumped to a 17-month low.
GBP exchange rates face further headwinds this morning. British retail sales fell unexpectedly in February, printing at -0.3% rather than 0.6%.
Euro (EUR) Muted amid Shifting Market Mood
The Euro (EUR) was mixed yesterday amid a shifting mood in European markets. Although Russia’s invasion presses on, news that the US and EU have agreed a deal on increasing American gas supplies to Europe cheered investors.
Meanwhile, the flash Eurozone PMIs added to EUR’s mixed movement. Although business activity fell, the composite PMI printed higher than forecast.
Germany’s latest Ifo business climate indicator this morning could create a headwind for the single currency. Will the war in Ukraine have weighed on business morale?
US Dollar (USD) Dips following Disappointing Data
The US Dollar (USD) stumbled yesterday after US durable goods orders contracted by 2.2%, far worse than the expected 0.5% decline.
Adding to the safe-haven currency’s woes was a modestly risk-on impulse in markets, although sentiment wavered throughout the day.
Some speeches from Federal Reserve officials could affect USD exchange rates today. However, the ‘Greenback’ has shown little sensitivity to Fed comments since the bank’s last policy decision, so risk appetite could remain the defining factor.
Canadian Dollar (CAD) Inches Higher despite Lack of Data
The Canadian Dollar (CAD) firmed overall yesterday despite a downtick in oil prices and a lack of Canadian data. The upside seems due to weakness in paired currencies, rather than CAD’s strength.
A speech from Bank of Canada (BoC) Deputy Governor Sharon Kozicki could provide CAD investors with fresh impetus later today.
Australian Dollar (AUD) Softens as Market Mood Sours
The Australian Dollar (AUD) hit fresh multi-month highs yesterday before edging lower overnight as a bearish market mood weighed on the riskier ‘Aussie’.
New Zealand Dollar (NZD) Wobbles amid Higher Commodities and Risk-Off Mood
The New Zealand Dollar (NZD) wavered overnight as the commodity- and risk-sensitive ‘Kiwi’ was supported by higher materials prices and undermined by a risk-off impulse in markets.