Pound (GBP) Slides as Economic Headwinds Continue
The Pound (GBP) plunged on Friday, falling to multi-week lows against some of its peers, as the UK’s economic troubles continued to pile up.
The UK’s final manufacturing PMI printed lower than preliminary estimates and the latest consumer credit data showed that the cost-of-living crisis is eating into disposable income. Meanwhile, more industrial action across multiple sectors is set to hit the UK in the coming weeks. Workers across the country seek pay rises to weather the income crunch.
With UK data thin on the ground today, the UK’s bleak outlook may continue to weigh on Sterling. The latest quarterly economic survey from the British Chambers of Commerce (BCC) says that the UK’s ‘key economic indicators [are] flashing red.’
Euro (EUR) Undermined by USD Strength
The Euro (EUR) initially ticked higher on Friday after Eurozone inflation exceeded forecasts. As inflation continues to surge higher, the European Central Bank (ECB) could be forced to take a more hawkish approach.
However, a surge in the US Dollar (USD) weighed heavily on the Euro, due to the negative correlation between the two currencies.
Earlier this morning, new data showed a sharp drop in the Germany’s trade surplus, which could weigh on EUR. For the remainder of the day, news from the Russia-Ukraine crisis and USD movement could impact the single currency.
US Dollar (USD) Soars on Hawkish Fed and Safe-Haven Flows
The US Dollar surged on Friday, moving close to multi-year highs, as fears of an impending global recession continued to drive investors towards the safe-haven currency.
In addition, expectations of aggressive rate rises from the Federal Reserve continued to underpin USD. Earlier in the week, Fed Chair Jerome Powell signalled that the US central bank would press ahead with tightening plans.
Amid a lack of American economic data today, risk appetite may determine the US Dollar’s trajectory.
Canadian Dollar (CAD) Buoyed by Oil Market Rally
The oil-sensitive Canadian Dollar (CAD) climbed at the end of last week as crude prices jumped higher.
Looking ahead, Canada’s latest manufacturing PMI could affect CAD. Will a slowdown dent the ‘Loonie’?
Australian Dollar (AUD) Recovers as Risk Appetite Returns
The risk-sensitive Australian Dollar (AUD) initially dipped overnight but rallied in the morning as the market mood improved.
New Zealand Dollar (NZD) Strengthens amid Improving Sentiment
Likewise, the New Zealand Dollar (NZD) wavered at the start of the overnight session before an increased appetite for risk boosted NZD.