Pound (GBP) Rocky amid Mixed Employment Report
The Pound (GBP) was mixed yesterday, rising against the Euro (EUR) and the US Dollar (USD) but falling against its other peers.
The lack of a clear direction came amid mixed UK jobs data. Although the unemployment rate fell to 3.8% – its lowest level since December 2019 – wage growth lagged behind inflation and economic inactivity rose.
UK inflation exceeded forecasts this morning, rising to a fresh 30-year high of 7%. With price pressures driving the country’s cost-of-living crisis, GBP may face headwinds today.
Euro (EUR) Slips as German Investor Morale Drops
The Euro took a tumble yesterday after Germany’s ZEW economic sentiment index slipped to its lowest level since March 2020.
In addition, concerning news from Ukraine also weighed on EUR. Russian President Vladimir Putin said that peace talks were at a ‘dead end’, while the devastated city of Mariupol braced for renewed Russian assaults.
With notable Eurozone data thin on the ground today, the Russia-Ukraine crisis could continue to dominate EUR exchange rates.
US Dollar (USD) Dented by Mixed Inflation Rate Readings
The US Dollar fell yesterday following mixed US inflation figures. While the headline CPI exceeded forecasts, the core CPI printed lower than expected. Some economists see this as a sign that US inflation may have peaked in March.
As a result, US Treasury yields pulled back sharply from their recent multi-year highs. This in turn dragged USD lower.
The US PPI could cause some movement this afternoon. In the meantime, risk appetite could determine USD’s strength.
Canadian Dollar (CAD) Firms amid Oil Market Rally
The commodity-linked Canadian Dollar (CAD) rose against many of its peers yesterday as oil prices rallied, with WTI crude gaining almost 5% through the European session. The rally in oil came as China eased lockdown restrictions, alleviating concerns about declining demand.
Today, CAD investors are focused on the Bank of Canada’s (BoC) interest rate decision. Economists expect a 50-bps rate hike from the BoC this afternoon. Although such a move is priced in, it could still boost CAD. If the bank enacts a smaller rate rise, the ‘Loonie’ might stumble.
Australian Dollar (AUD) Slips amid Choppy Trade
The Australian Dollar (AUD) wavered overnight amid some mixed data, heading lower overall. Consumer confidence in Australia fell, but less than was expected. Meanwhile, a fairly downbeat mood in Asian markets weighed on the risk-sensitive ‘Aussie’.
New Zealand Dollar (NZD) Tumbles after RBNZ Rate Hike
The New Zealand Dollar (NZD) spiked ahead of the Reserve Bank of New Zealand (RBNZ) interest rate decision, but then slumped after the bank announced a steeper-than-expected 50-bps rate hike. Traders considered the move ‘dovish’ as the RBNZ may end up raising interest rates by less overall.