Pound (GBP) Fluctuates as PM’s Future Uncertain
The Pound (GBP) experienced some volatility yesterday amid a political crisis in the UK. Following a wave of high-profile resignations, analysts began predicting that Boris Johnson could be out of No 10 within days.
With no clear frontrunner for the Conservative leadership, GBP investors are unsure whether Johnson’s exit will be positive or negative for the UK, although once a new leader is in place it could bring more stability. Sterling fluctuated amid the uncertainty.
Resignations continue to pour in, so the Pound could face continued volatility today. In addition, a speech from Bank of England (BoE) policymaker Catherine Mann may impact GBP exchange rates.
Euro (EUR) Languishes amid Ongoing Recession Fears
The sell-off in the Euro (EUR) continued yesterday, with EUR hitting a fresh two-decade low against the US Dollar (USD), as Eurozone recession fears continued to rattle investors.
Meanwhile the US Dollar’s ongoing strength also weighed heavily on the Euro, due to the negative correlation between the two currencies.
Today, the European Central Bank’s (ECB) latest meeting minutes are in the spotlight for EUR investors. Could hints of a more hawkish policy approach help the single currency recover?
US Dollar (USD) Hits Fresh 20-Year High ahead of FOMC Minutes
The US Dollar extended its bullish run yesterday, with the US Dollar Index hitting a fresh 20-year high, as markets braced for the hawkish Federal Open Market Committee (FOMC) meeting minutes from June.
The FOMC minutes confirmed the US central bank’s plans to continue on its aggressive tightening path. However, the safe-haven US Dollar eased slightly following the release, mainly due to a slight recovery in risk appetite.
Looking ahead, the latest US jobs data could boost the ‘Greenback’ if it shows continued strength in the labour market. Later this evening, speeches from two Federal Reserve policymakers could also impact USD. If they maintain a hawkish tone the US Dollar could climb.
Canadian Dollar (CAD) Inches Higher despite Softer Crude Prices
The crude-linked Canadian Dollar (CAD) managed to rise against some of its weaker peers yesterday, despite a drop in oil prices, without a clear catalyst for the movement.
Canada’s latest Ivey PMI could add to CAD’s downside this afternoon if it shows a steep decline, as expected.
Australian Dollar (AUD) Firms as Trade Balance Beats Forecasts
The Australian Dollar (AUD) strengthened in overnight trade thanks to a risk-on impulse in markets and a larger-than-forecast Australian trade surplus.
New Zealand Dollar (NZD) Enjoys Improving Market Mood
The risk-sensitive New Zealand Dollar (NZD) also gained ground last night as a recovery in market sentiment lifted the ‘Kiwi’.