Pound (GBP) Mixed on Upbeat GDP and Risk-Off Mood
The Pound (GBP) was mixed yesterday, heading sideways against many of its peers, despite the UK’s GDP growth rate for the fourth quarter of 2021 printing higher than previous estimates.
This upbeat data wasn’t enough to lift the risk-sensitive Pound amid a bearish market mood. Investors once again seemed worried about the crisis in Ukraine, as evident in the fall in European equity markets.
The UK’s final manufacturing PMI this morning is unlikely to cause much movement, unless it differs significantly from the preliminary result. Therefore, risk appetite could be the primary factor affecting GBP today.
Euro (EUR) Falls as Ukraine Optimism Fades
The Euro (EUR) slipped yesterday as optimism from Tuesday’s Russia-Ukraine peace talks faded. Analysts warned that Russia was simply repositioning its troops rather than withdrawing them as it prepares for further offensives.
In addition, Russian President Vladimir Putin announced that from today ‘unfriendly’ foreign buyers of Russian gas must pay in Russian Rubles (RUB) or have their contracts cancelled. As Europe buys a third of its gas from Russia, the news spooked EUR investors.
Aside from Russia-Ukraine news, the Eurozone’s latest CPI is in focus today. Another record-high reading could hurt the Euro.
US Dollar (USD) Stumbles as Inflation Misses Forecasts
The US Dollar (USD) initially stumbled against many of its peers yesterday, despite the downbeat market mood, as US data missed forecasts. Most notably, the core PCE price index, which is the Federal Reserve’s preferred measure of inflation, printed 0.1 percentage points below expectations.
The ‘Greenback’ did manage to regain ground towards the evening. Recovering US Treasury yields lent USD some support.
The latest US jobs data is in the spotlight for USD investors today. Economists expect strong results from both the non-farm payrolls report and the unemployment rate. If the data meets expectations, USD could climb.
Canadian Dollar (CAD) Firms following GDP Data
The Canadian Dollar (CAD) firmed against many of its rivals yesterday, despite declining crude prices. The upside came as Canada’s latest GDP data cheered CAD investors. January’s growth printed at 0.2%, as expected, while December’s was revised up from 0% to 0.1%.
Later this afternoon, Canada’s manufacturing PMI for March could cause some movement.
Australian Dollar (AUD) Slips as Chinese Manufacturing Contracts
The Australian Dollar (AUD) fell overnight as China’s Caixin manufacturing PMI pointed to a contraction in factory activity, thereby denting the China-proxy currency. However, the ‘Aussie’ was able to rebound without a clear catalyst for the movement.
New Zealand Dollar (NZD) Softens amid Bearish Market Mood
The New Zealand Dollar (NZD) also headed lower in overnight trade, as a risk-off mood in Asian markets sapped demand for the riskier ‘Kiwi’.