Pound (GBP) Recovers from Early Slump
The Pound (GBP) initially dropped yesterday as an increase in government borrowing and troubling PMI results worried GBP investors.
However, Sterling managed to regain lost ground, seemingly benefiting from some cross-driven strength as the Euro (EUR) suffered a sell-off.
Earlier this morning, the latest UK retail sales figures showed a 0.5% contraction last month. This could weigh on Sterling as the morning unfolds.
Euro (EUR) Slides on Dire PMIs
The Euro slumped yesterday following some dismal PMI results. Eurozone manufacturing and service-sector activity declined far more than was forecast, once again raising worries of a recession in the bloc.
In addition, ongoing energy insecurity in mainland Europe hurt the single currency. Germany – Europe’s largest economy – raised its gas risk level to the second of three emergency phases.
This morning, Germany’s latest business climate indicator fell slightly more than forecast, which could weigh on EUR.
US Dollar (USD) Sheds Gains as US Treasury Yields Drop
The safe-haven US Dollar (USD) rose at the start of yesterday’s session amid a downbeat market mood.
However, the ‘Greenback’ couldn’t hold its gains. A slight improvement in risk sentiment undermined USD, while a sharp drop in US Treasury yields also pulled the currency lower.
Later this afternoon we have the final consumer sentiment score from the University of Michigan. If it confirms a slump in morale, USD could stumble.
Canadian Dollar (CAD) Wobbles as Oil Remains Muted
The oil-linked Canadian Dollar (CAD) fluctuated yesterday, ticking lower against some peers, as crude prices wavered near a six-week low.
If the oil market remains subdued again today, CAD exchange rates could continue to wobble.
Australian Dollar (AUD) Firms amid Improving Market Mood
The Australian Dollar (AUD) edged higher against many of its peers overnight. The risk- and resource-linked ‘Aussie’ enjoyed an upbeat market mood and rising commodities prices.
New Zealand Dollar (NZD) Rises amid Risk-On Trade
Similarly, the New Zealand Dollar (NZD) rose as risk appetite returned to markets.