Pound (GBP) Plummets amid Strong Headwinds
In addition, the EU is likely to launch legal action against the UK for its plans to scrap parts of the Northern Ireland protocol, which could increase the likelihood of a trade war. Meanwhile, Scottish First Minister Nicola Sturgeon will begin campaigning for a second Scottish independence referendum.
There’s no UK data due out today. As a result, these issues may remain the focus for GBP investors.
Euro (EUR) Firms as German Sentiment Improves
The Euro (EUR) rose against many of its peers yesterday, despite some choppy trade.
The upside came following an improvement in German economic sentiment, although morale remains low overall.
This morning, the Euro is on the rise following news that the European Central Bank (ECB) will hold an unscheduled meeting to discuss how to tackle fragmentation. Fragmentation fears were a key factor in the Euro’s post-ECB sell-off last week.
US Dollar (USD) Rises amid Risk-Off Trade
The US Dollar (USD) pushed higher yesterday as a souring market sentiment increased the safe-haven currency’s appeal.
A slightly softer-than-expected PPI reading in the afternoon took the wind out of USD’s sails, but it held on to most of its gains.
Later this evening we have the Federal Reserve interest rate decision. After last week’s hot inflation figures, some investors are betting on a 75-bps rate rise. Expect some sharp movement in USD.
Canadian Dollar (CAD) Enjoys Oil Price Jump
The oil-tied Canadian Dollar (CAD) found success towards the end of yesterday’s session as WTI crude climbed by $2 per barrel.
Canadian data is sparse today, so movements in the oil market might drive CAD exchange rates.
Australian Dollar (AUD) Edges Up despite Consumer Confidence Fall
The Australian Dollar (AUD) firmed overnight amid a slight improvement in the market mood, despite a larger-than-forecast decline in Australian consumer confidence.
New Zealand Dollar (NZD) Subdued on Current Account Miss
The New Zealand Dollar (NZD) was muted in overnight trade as a wider-than-expected New Zealand current account deficit weighed on the ‘Kiwi’.