Pound (GBP) Muted in Absence of Data
The Pound (GBP) was subdued yesterday as a lack of UK data left GBP without much impetus.
Additionally, a shifting market mood – which was downbeat overall – kept the risk-sensitive Pound on the back foot.
With UK data still thin on the ground today, risk appetite and domestic economic news could drive most movement in Sterling.
Euro (EUR) Buoyed by Upbeat Economic Releases
The Euro (EUR) initially dipped yesterday, as central bank policy divergence and the Ukraine crisis pressured the single currency.
However, positive data helped EUR recover as the session unfolded. German industrial production unexpectedly improved, while Eurozone retail sales figures confirmed sales growth in February. In addition, a hawkish tone from the European Central Bank (ECB) meeting minutes added to EUR’s upside.
There are no Eurozone releases due out for the remainder of the week, so EUR will likely trade on sentiment around the Russia-Ukraine crisis.
US Dollar (USD) Edges Higher amid Risk-Off Mood
The US Dollar (USD) wavered yesterday, inching higher against its weaker rivals, as risk aversion increased the safe-haven currency’s appeal.
The hawkish minutes from last month’s Federal Open Market Committee (FOMC) meeting also underpinned USD. However, concern that fast action from the Fed will trigger a recession severely limited the upside and caused some choppiness.
Amid a lack of market-moving data from the US today, risk sentiment could exert the strongest influence over USD exchange rates.
Canadian Dollar (CAD) Dented by Drop in Crude Prices
The oil-sensitive Canadian Dollar (CAD) fell against the majority of its peers yesterday as WTI crude slumped below $95 a barrel.
Looking ahead, Canada’s latest jobs data this afternoon could help the ‘Loonie’ recover. Economists expect the unemployment rate to fall from 5.5% to 5.3%.
Australian Dollar (AUD) Rangebound on RBA and Gloomy Mood
The Australian Dollar (AUD) was flat in overnight trade as concerns over China’s zero-Covid strategy offset tailwinds from the Reserve Bank of Australia’s (RBA) recent hawkish tilt.
New Zealand Dollar (NZD) Softens amid Global Economic Fears
The risk-sensitive New Zealand Dollar (NZD) ticked lower overnight amid a risk-averse mood among investors. Markets are concerned that lockdowns in China, the Ukraine war and Federal Reserve rate hikes could stifle the global economy.