Pound (GBP) Rallies on Apparent Breakthrough in Peace Talks
The Pound (GBP) was initially subdued yesterday as lingering headwinds from Bank of England (BoE) Governor Andrew Bailey’s speech kept pressure on the currency.
However, an apparent breakthrough in Russia-Ukraine peace talks cheered European markets late in the morning. As a result, Sterling surged higher against most of its peers.
With no UK data out today, sentiment around the Russia-Ukraine war could drive most movement in GBP.
Euro (EUR) Soars on Positive Russia-Ukraine News
The Euro (EUR) roared higher yesterday as the latest round of negotiations between Russia and Ukraine appeared to make headway.
Following the talks, Russia’s defence ministry said it would ‘radically reduce military activity in the direction of Kyiv and Chernihiv’ in order to ‘increase mutual trust’ and create the conditions for a peace deal. While some analysts are wary, the move could be a significant de-escalation.
A speech from European Central Bank (ECB) President Christine Lagarde could cause movement this morning. Will a dovish tone from the ECB chief offset the upbeat mood around Ukraine?
US Dollar (USD) Stutters as Risk Sentiment Improves
The US Dollar (USD) slipped against most of its peers yesterday as the upbeat market mood saw investors ditch the safe-haven currency for higher-yielding assets.
However, strong US data and an increasingly hawkish outlook from the Federal Reserve underpinned the ‘Greenback’, limiting its losses.
The ADP employment change report is today’s biggest release. Economists expect another robust reading, which could further boost bets for a 50-bps rate hike at the Fed’s next meeting, thereby supporting USD.
Canadian Dollar (CAD) Slips amid Dip in Oil Prices
The commodity-linked Canadian Dollar (CAD) stumbled yesterday as the positive developments in the Russia-Ukraine peace talks pushed oil prices lower.
In the absence of Canadian data today, movements in the oil market could continue to drive CAD exchange rates.
Australian Dollar (AUD) Wobbles amid Mixed Factors
The Australian Dollar (AUD) wavered overnight, heading sideways overall, as Russia-Ukraine peace talks created a mixed appetite for the riskier, commodity-linked ‘Aussie’. The upbeat mood supported AUD while softer commodities prices undermined it.
New Zealand Dollar (NZD) Firms as Business Confidences Rises
The New Zealand Dollar (NZD) ticked higher in overnight trade as business confidence in New Zealand unexpectedly improved, cheering NZD investors.