Pound (GBP) Recoups Tuesday’s Losses as Markets Reposition
The Pound (GBP) managed to tick higher against many of its peers yesterday, recovering some of the previous day’s losses.
The movement seemed to be a technical correction after Sterling dropped to multi-year lows against some of its peers as there was no clear catalyst for the movement. Worries about the UK economy and the war in Ukraine remain challenging headwinds for GBP.
UK economic data is thin on the ground today. As a result, cost-of-living concerns and risk appetite could exert the greatest influence over the Pound.
Euro (EUR) Rises from Recent Lows amid Dip-Buying
Similarly, the Euro (EUR) rose from multi-year lows yesterday as EUR investors sought to buy the dip.
However, headwinds limited the single currency’s recovery. German factory orders slumped by 2.2% in February while a gloomy mood around the Ukraine crisis also weighed on EUR sentiment.
An expected rise in Eurozone retail sales could help bolster the Euro this morning. EUR investors will also play close attention to the European Central Bank (ECB) meeting minutes. Will they contain any hawkish surprises?
US Dollar (USD) Unsteady amid US Recession Risks
The US Dollar (USD) was mixed yesterday as traders felt ambivalent about the Federal Reserve’s aggressive tightening path.
While increasing the fed funds rate would likely boost USD, economists fear that tightening monetary policy too quickly could tip the US economy into a recession.
As a result, the hawkish Federal Open Market Committee (FOMC) meeting minutes in the evening had a muted effect on USD.
Today, four Fed policymakers are due to speak and the latest initial jobless claims report is out. Will these releases boost USD or will recession risks continue to cause some turbulence?
Canadian Dollar (CAD) Mixed on Strong PMI and Weaker Oil Prices
The commodity-linked Canadian Dollar (CAD) failed to find a clear trajectory yesterday, trading in all directions against its main counterparts. The instability came as softer oil prices offset a stellar Ivey PMI.
With no Canadian data due out today, movements in the oil market may drive CAD exchange rates.
Australian Dollar (AUD) Stumbles amid Multiple Headwinds
The Australian Dollar (AUD) fell overnight as a bearish market mood weighed on the riskier ‘Aussie’. In addition, Australia’s trade figures and services index printed well below forecasts, adding to AUD’s downside.
New Zealand Dollar (NZD) Loses Appeal amid Risk-Off Mood
Likewise, the New Zealand Dollar (NZD) dipped in overnight trade. The hawkish FOMC minutes and China’s ongoing, costly battle with Covid sapped the market appetite for riskier currencies, such as NZD.