Pound (GBP) Firms as Investors Hope for Political Certainty
The Pound (GBP) rose yesterday following the news that Boris Johnson would face a no confidence vote that evening.
GBP investors expected Johnson to win the vote, which would protect him from another vote for a year, thereby providing some political stability in the UK.
Although Johnson did win the no confidence vote, 41% of Tory MPs voted to get rid of him. This was a worse performance than Theresa May, who lasted only five months after her ballot. Therefore, the political uncertainty continues and Sterling may be under pressure today.
Euro (EUR) Falls as Russia-Ukraine Tensions Rise
The Euro (EUR) slipped during yesterday’s session as tensions between Russia and the West continued to build. Russia struck Kyiv with missiles on Sunday – the first attack on Ukraine’s capital in over a month. The Kremlin then said it would attack new targets if the West supplies Ukraine with long-range missiles.
The Russia-Ukraine war has created significant challenges for the Eurozone economy, particularly around energy prices. Therefore, bad news tends to weigh on EUR.
The Euro could face headwinds this morning after German factory orders unexpectedly slumped by 2.7% in April.
US Dollar (USD) Climbs despite Risk-Positive Trade
The US Dollar (USD) initially fell on Monday as a risk-on mood dampened demand for the safe-haven currency.
However, the ‘Greenback’ was able to recover some losses in the afternoon, with no clear catalyst for the movement.
During today’s session, the global market mood may continue to drive USD exchange rates.
Canadian Dollar (CAD) Mixed amid Thin Trading Conditions
The Canadian Dollar (CAD) was mixed yesterday as a lack of Canadian data and muted movement in the oil market left the ‘Loonie’ without a clear direction.
Today we have both Canada’s balance of trade figures and the Ivey PMI. Any unexpected results could cause volatility in CAD.
Australian Dollar (AUD) Rises on RBA’s Hawkish Hike
The Australian Dollar (AUD) strengthened in overnight trade after the Reserve Bank of Australia (RBA) delivered a surprisingly hawkish 50-bps rate rise.
New Zealand Dollar (NZD) Falls as Sentiment Sours
The New Zealand Dollar (NZD) slipped overnight as a souring market mood dented the risk-sensitive ‘Kiwi’.