Pound (GBP) Extends Downside amid Income Crunch
The Pound (GBP) stumbled yesterday as the UK’s cost-of-living crisis continued to cause headwinds for the currency.
Following Friday’s dismal retail sales figures, new data from the Office for National Statistics (ONS) highlighted the plight of UK households. One standout figure from the report was that almost a quarter of adults reported struggling to pay their bills last month.
In the absence of any notable UK data for the remainder of the day, cost-of-living concerns may continue to weigh on GBP.
Euro (EUR) Ticks Lower as German Business Morale Remains Low
The Euro (EUR) softened against the majority of its peers yesterday after some lacklustre data. While Germany’s Ifo business climate index unexpectedly edged higher, it remains close to a 14-month low.
Meanwhile, Russia’s invasion of Ukraine grinds on. As the Eurozone economy is vulnerable to the fallout from the war, EUR remained under pressure.
Eurozone data is thin on the ground today so sentiment around the Ukraine crisis could dominate EUR exchange rates.
US Dollar (USD) Firms as China Lockdowns Fuel Economic Fears
The safe-haven US Dollar (USD) strengthened yesterday amid widespread risk aversion as China Covid-19 fears rattled markets.
As China imposes strict restrictions to combat rising Covid cases, markets fear the measures could cause further headaches for the global economy.
Looking ahead, an expected recovery in US durable goods orders could help to support USD in the afternoon.
Canadian Dollar (CAD) Posts Modest Gains on Hawkish BoC
The crude-linked Canadian Dollar (CAD) firmed against some of its weaker peers yesterday, despite a sharp decline in oil prices. The upside came as Bank of Canada (BoC) Governor Tiff Macklem said the BoC would act ‘forcefully’ to contain inflation if needed.
A speech from BoC Deputy Governor Timothy Lane could also buoy the Canadian Dollar today. After last week’s above-expected CPI, will Lane echo Macklem’s hawkish stance?
Australian Dollar (AUD) Edges Up amid Dip-Buying
The Australian Dollar (AUD) inched higher in overnight trade, with the ‘Aussie’ attracting some dip-buying after dropping to multi-month lows in the previous session.
New Zealand Dollar (NZD) Rises off Multi-Month Lows amid Bargain Hunting
Likewise, the New Zealand Dollar (NZD) enjoyed a modest lift as investors sought to pick up a bargain.