Pound (GBP) Subdued amid Mixed Sterling Sentiment
The Pound (GBP) was mixed yesterday, finding some support as the weakened currency attracted dip-buying.
Meanwhile, a large decline in the Confederation of British Industry’s (CBI) distributive trades balance offset a slight improvement in market mood, adding to GBP’s uncertain direction.
Later this morning, Bank of England (BoE) Governor Andrew Bailey is due to speak. If Bailey expresses concern about the UK’s fragile economy, GBP could slip.
Euro (EUR) Declines on Poor Data and Ukraine Crisis
The Euro (EUR) fell yesterday after Germany’s GfK consumer climate indicator plunged to its lowest level on record.
Adding to EUR’s downside, Russian state-owned gas giant Gazprom cut supplies to Poland and Bulgaria for failing to pay for their contracts in Russian Roubles (RUB). Soaring energy prices and energy insecurity are key economic worries for the Eurozone, which relies on Russian fossil fuels.
Coming up we have the Eurozone’s latest economic sentiment indicator. Economists expect it to edge down, refreshing its lowest level since March 2021. Such a result could further dent the single currency.
US Dollar (USD) Inches Higher as US Treasury Yields Rise
The US Dollar (USD) edged higher during yesterday’s session as an uptick in US Treasury yields buoyed the ‘Greenback’.
However, a lack of notable US economic data and a modest increase in risk appetite capped USD’s gains.
The latest US GDP growth rate this afternoon could cause some movement in the ‘Greenback’. Forecasters expect GDP growth to have slowed sharply in the first quarter of 2022, which may weigh on USD somewhat.
Canadian Dollar (CAD) Mixed in Absence of Data
The commodity-linked Canadian Dollar (CAD) wavered yesterday amid a lack of data and a muted oil market, though it did manage to rise against its weaker peers.
With market-moving Canadian data still thin on the ground today, the ‘Loonie’ may trade primarily on oil price dynamics.
Australian Dollar (AUD) Gains as Market Mood Improves
The Australian Dollar (AUD) was mostly flat overnight but managed to jump higher this morning as a bullish mood boosted the risk-sensitive currency.
New Zealand Dollar (NZD) Undermined by Poor Data
The New Zealand Dollar (NZD) dipped overnight after New Zealand’s balance of trade and business confidence reports both printed below forecasts. The riskier ‘Kiwi’ was able to recoup some losses later in the session as the market mood improved.