Pound (GBP) Slides as UK Economic Outlook Darkens Again
The Pound (GBP) faced heavy selling pressure last Wednesday as GBP investors worried about the UK’s worsening economic outlook.
Data from the Institute of Directors showed that economic confidence in the UK had slumped to its worst reading since October 2020. Business leaders remain pessimistic about rising inflation and Brexit issues, which may be stifling investment.
Sterling then trended lower through the final part of the week.
This morning, GBP exchange rates have opened higher. However, with a vote of no confidence in Boris Johnson set to take place this evening, the Pound may come under pressure.
Euro (EUR) Slips due to Eurozone Energy Insecurity
The Euro (EUR) fell through Wednesday’s session as the Russia-Ukraine war cast a cloud over European markets.
With the EU banning Russian oil and Russia cutting further gas supplies to Europe, EUR investors grew concerned that more economic pain is on the way for the Eurozone.
EUR regained some ground at the end of the week, despite a larger-than-forecast contraction in Eurozone retail sales.
With no notable Euro area data out today, Russia-Ukraine news could impact EUR exchange rates.
US Dollar (USD) Rises on Strong Manufacturing PMI
The US Dollar (USD) strengthened on Wednesday after an unexpected rise in the ISM manufacturing PMI.
Meanwhile, a risk-off mood also supported the safe-haven currency.
The ‘Greenback’ then lost most of these gains on Thursday as the market mood improved.
A lack of market-moving US data today may leave the US Dollar to continue to trade on risk sentiment.
Canadian Dollar (CAD) Climbs on BoC’s Hawkish Hike
The Canadian Dollar (CAD) firmed against many of its peers on Wednesday after the Bank of Canada (BoC) hiked interest rates by 50 basis points.
The tailwinds persisted through the remainder of the week, lifting CAD even higher.
In the absence of any economic data today, oil price dynamics may drive movement in the crude-linked Canadian Dollar.
Australian Dollar (AUD) Ticks Lower as Risk Appetite Wanes
The Australian Dollar (AUD) softened overnight as market optimism faded somewhat, thereby dampening the appeal of the risk-sensitive ‘Aussie’.
New Zealand Dollar (NZD) Retreats amid Fading Risk Sentiment
Likewise, the risky New Zealand Dollar (NZD) also edged lower as investors grew more cautious.