Pound Slips, US Dollar Firms on Global Recession Fears

Pound (GBP) Undermined by Souring Market Mood

The Pound (GBP) initially rose on Friday as the Bank of England’s (BoE) hawkish hint of future rate hikes continued to provide a tailwind for GBP.

However, as market sentiment soured in the afternoon, the risk-sensitive UK currency slipped against its safer rivals.

This afternoon, a speech from BoE policymaker Catherine Mann could impact the Pound. Mann was one of the three dissenting voices at the BoE’s meeting on Thursday, voting for a larger 50-bps rate rise. Could she strike a hawkish tone, thereby boosting Sterling?

Euro (EUR) Firms despite Lack of Impetus

The Euro (EUR) climbed against the majority of its peers through Friday’s session, without a clear catalyst for the movement.

The single currency seemed unfazed by the strength in the US Dollar (USD), despite EUR’s negative correlation with the American currency.

Turning to today, there’s a lack of notable Eurozone economic data on the calendar. As a result, EUR could trade without a clear trajectory.

US Dollar (USD) Buoyed by Risk-Off Trade

The US Dollar strengthened on Friday as a bearish tone saw investors flock to the safe-haven currency.

With central banks aggressively hiking rates to tame surging inflation, and with economic growth slowing, economists fear a global recession may be on the horizon. As a result, traders ditched riskier currencies in favour of the safer US Dollar.

With no US data scheduled for today, risk appetite could drive USD exchange rates.

Canadian Dollar (CAD) Muted amid Mixed Trade

The Canadian Dollar (CAD) faced mixed trade on Friday. On the one hand, a decline in crude prices weighed on the commodity-linked ‘Loonie’. On the other, a sharp rise in Canada’s PPI boosted Bank of Canada (BoC) rate hike bets.

During today’s session, a lack of Canadian data could mean oil price movements drive the ‘Loonie’.

Australian Dollar (AUD) Rises despite Lack of Risk Appetite

The Australian Dollar (AUD) edged higher in overnight trade, despite a mixed market mood, without a clear catalyst for the movement.

New Zealand Dollar (NZD) Climbs despite Tepid Sentiment

Likewise, the New Zealand Dollar (NZD) firmed overnight, as the risk-sensitive ‘Kiwi’ shrugged off a lack of risk appetite.

Samuel Birnie

Contact Samuel Birnie


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