Pound (GBP) Undermined by Dovish BoE
The Pound (GBP) sank against its peers yesterday, as Bank of England (BoE) Governor Andrew Bailey gave a dovish speech titled ‘Macroeconomic and Financial Stability in Changing Times’.
Bailey reiterated that ‘the situation is very volatile’, adding that it ‘will take time before we really come to a proper assessment of how the joint experience of COVID and the Ukraine invasion [may] cause the world economy to emerge into new steady state.’
In the absence of any high-impact UK data today, the Pound may struggle to find any clear directional bias.
Euro (EUR) Dented by Ukraine Woes
The Euro (EUR) ticked lower at the start of this week, with the currency being undermined by ongoing concerns over the war in Ukraine
Also lending support to the single currency was speculation regarding the beginning of the European Central Bank (ECB)’s hiking cycle. The central bank is expected to hike interest rates for the first time in over a decade at some point this year.
Into today, German consumer confidence data could have some effect on Euro trading, alongside US Dollar dynamics and risk sentiment. If risk-on trading resumes, EUR might enjoy further upside.
US Dollar (USD) Boosted by Risk-Off Sentiment
The US Dollar (USD) climbed against its peers on Monday as an overall risk-off market mood drew support towards safe-haven currencies.
Despite a resumption in negotiations between Ukraine and Russia, with Ukrainian President Volodymyr Zelenskyy stating his intention to secure ‘peace without delay’, officials have stated they don’t think there will be any breakthrough in the next round of talks.
Further buoying the ‘Greenback’ is a fall in the USA’s goods trade deficit from an all-time high of $107.63 billion in January.
The latest JOLTs job opening figures may direct USD exchange rates today;, with another robust reading potentially bolstering Federal Reserve rate hike expectations.
Canadian Dollar (CAD) Slides on Lower Oil Prices
The Canadian Dollar (CAD) weakened yesterday as the price of crude oil fell. Demand for the commodity is expected to decrease as Shanghai goes into lockdown over record numbers of coronavirus cases.
Australian Dollar (AUD) Recovers as Retail Sales Beat Forecasts
The Australian Dollar (AUD) initially dipped during overnight trade but then rallied following better-than-expected Australian retail sales data. Domestic sales grew by 1.8% in February, beating forecasts of 1%.
New Zealand Dollar (NZD) Rangebound amid Lack of Data
The New Zealand Dollar (NZD) wavered sideways overnight as a lack of New Zealand data and a mixed market mood kept the ‘Kiwi’ in a narrow range.