Pound (GBP) Firms despite GDP Miss
The Pound (GBP) gained ground yesterday despite new GDP data showing that the UK economy slowed more than expected in February.
One factor underpinning the Pound was the uptick in UK government bond yields. The ten-year guilt hit a fresh six-year high, rising by 0.09% and outperforming many of its counterparts. Despite recent dovishness from the Bank of England (BoE), markets continue to bet on a fourth consecutive rate rise next month.
Mixed employment data could send the Pound either way today. The unemployment rate dropped to 3.8%, as expected. However, economic inactivity rose and wage growth continues to lag behind inflation, worsening the cost-of-living crunch.
Euro (EUR) Buoyed as Macron Takes the Lead
The Euro (EUR) initially rose yesterday as EUR investors cheered Emmanuel Macron’s first-round win in the French presidential elections. Macron is France’s current pro-EU president, so his re-election would provide stability in the Eurozone.
However, the single currency dipped against its stronger rivals in the afternoon. The mood around the Ukraine crisis was downbeat, with Moscow saying it will not pause military operations during peace talks.
This morning, investors are focused on Germany’s latest ZEW economic sentiment index. Will another slump drag the Euro lower?
US Dollar (USD) Rangebound ahead of US CPI
The US Dollar (USD) wobbled in a narrow range yesterday as a risk-averse market mood failed to boost the safe-haven currency.
USD investors may have been holding back bets ahead of the US inflation rate reading today.
Economists expect US inflation to rise from 7.9% to a fresh 40-year high of 8.4%. If the CPI meets or exceeds expectations, USD could climb.
Canadian Dollar (CAD) Slips as Oil Prices Decline
The commodity-linked Canadian Dollar (CAD) fell yesterday as crude prices declined. Demand fears amid lockdowns in China and plans from the US to release reserves weighed on oil markets.
With no Canadian data out today, CAD investors may continue to take their cues from oil prices.
Australian Dollar (AUD) Climbs on Rise in Business Confidence
The Australian Dollar (AUD) strengthened overnight after Australia’s NAB business confidence survey unexpectedly improved, hitting a five-month high.
New Zealand Dollar (NZD) Gains amid Risk-Positive Mood
The New Zealand Dollar (NZD) also ticked higher in overnight trade as a bullish market mood boosted the appeal of the risk-sensitive ‘Kiwi’.