Pound (GBP) Wavers amid Shifting Market Mood
The Pound (GBP) initially fell at the start of yesterday’s session. A bearish tone following poor Chinese economic data spilled over into European markets, weighing on the risk-sensitive UK currency.
GBP managed to recoup some losses as the day went on and the market mood improved. However, it still slipped lower against its riskier rivals.
This morning, the UK unemployment rate unexpectedly fell, giving the pound a boost. However, regular pay continues to lag behind inflation, so cost-of-living fears may cap GBP gains.
Euro (EUR) Slips amid Economic Concerns
The Euro (EUR) declined yesterday, erasing the morning’s modest success, after the Eurozone unexpectedly posted a trade deficit for March.
Meanwhile, the European Commission downgraded EU growth forecasts for 2022 from 4% to 2.7%, further pressuring the single currency.
An expected downward revision to the Eurozone’s GDP growth rate for the first quarter of this year could weigh on EUR later this morning.
US Dollar (USD) Muted as Risk Appetite Wavers
The safe-haven US Dollar (USD) wobbled during yesterday’s session as risk sentiment shifted.
However, Federal Reserve rate hike bets continued to underpin the ‘Greenback’ and limit any losses.
Later today, US retail sales are forecast to show strong growth in April. Could this boost USD exchange rates?
Canadian Dollar (CAD) Buoyed by Rising Oil Prices
The Canadian Dollar (CAD) had mixed success yesterday, rising against its weaker peers as an uptick in crude prices supported the commodity-linked ‘Loonie’.
A lack of notable Canadian data today could leave CAD to continue trading on oil price dynamics.
Australian Dollar (AUD) Firms following Hawkish RBA Minutes
The Australian Dollar (AUD) strengthened overnight following the Reserve Bank of Australia’s (RBA) hawkish meeting minutes. The minutes revealed that policymakers had considered a 40-bps rate rise at the last interest rate decision, suggesting that steeper hikes could be on the cards in the future.
New Zealand Dollar (NZD) Enjoys AUD Correlation
The New Zealand Dollar (NZD) also climbed in overnight trade, boosted by its positive correlation to the ‘Aussie’ and a risk-on market mood.