Euro Slides as Russia-Ukraine Crisis Intensifies

Pound (GBP) Rebounds as Investors Buy the Dip

The Pound (GBP) initially slipped yesterday after UK GDP unexpectedly contracted by 0.1% in March, fuelling fears that the UK could be heading towards a recession.

However, Sterling entered oversold conditions, hitting a two-year low against the US Dollar (USD), and attracted some dip-buying. In addition, a sharp sell-off in the Euro (EUR) may have seen some European investors jump to the Pound, helping to buoy GBP.

With no UK data due out today, domestic headlines may drive movement in Pound Sterling. Brexit tensions could cause headwinds, while any news of government support amid the cost-of-living crisis might bolster GBP.

Euro (EUR) Tumbles as Russia-EU Tensions Rise

The Euro slumped during yesterday’s session as Russia threatened to retaliate after Finland signalled that it would apply join Nato.

This seemed to spook EUR investors, serving as a stark reminder that the Ukraine crisis could escalate into a wider conflict. Additionally, the associated risk aversion saw the US Dollar Index rise to a 20-year high. Due to EUR’s negative correlation with USD, this pressured the single currency further.

The Eurozone’s latest industrial production data is out this morning. However, EUR investors may be more focused on the latest headlines surrounding the Russia-Ukraine crisis.

US Dollar (USD) Steady amid Risk-Off Mood

The US Dollar held strong yesterday, trading near multi-year highs against many of its peers, as a bearish market mood boosted the appeal of the safe-haven currency.

The ‘Greenback’ did struggle to push higher against some of its stronger peers, however, wavering in a narrow range for much of the session.

Turning to today, the latest consumer sentiment report from the University of Michigan could cause some movement. Could an expected drop in morale chip away at the Dollar’s strength?

Canadian Dollar (CAD) Wavers despite Rising Oil Prices

The commodity-linked Canadian Dollar (CAD) wobbled yesterday, heading sideways overall, despite an uptick in oil prices.

A lack of notable Canadian data today could leave the ‘Loonie’ vulnerable to external trading factors.

Australian Dollar (AUD) Firms as Markets Recover

The Australian Dollar (AUD) ticked higher in overnight trade as a recovery in the market mood boosted the risk-sensitive ‘Aussie’.

New Zealand Dollar (NZD) Edges Up as Risk Appetite Improves

The New Zealand Dollar (NZD) also made some modest gains overnight, with the riskier ‘Kiwi’ enjoying an increased appetite for risk.

Samuel Birnie

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