Pound (GBP) Slides amid Political Jitters
The Pound (GBP) retreated against the majority of its peers yesterday. Ongoing UK political uncertainty making the currency unattractive to investors.
A gloomy market mood also acted as a headwind for the increasingly risk-sensitive Sterling on Tuesday.
The release of the UK’s latest GDP figures sees the Pound get off to a stronger start this morning after May’s figures reported a surprise expansion in growth.
Euro (EUR) Undermined by Slump in German Economic Sentiment
The Euro (EUR) opened Tuesday on the defensive. EUR exchange rates weakened in the wake of Germany’s latest ZEW index. Which reported a dramatic slump in economic sentiment this month.
This saw the EUR/USD exchange rate come to the brink of parity, before a modest correction allowed the Euro to recoup some ground later in the session.
The Eurozone’s latest industrial production figures could apply additional pressure to the euro later this afternoon as May’s figures are expected to report a slowing of production growth.
US Dollar (USD) Firms in Risk-Off Trade
The US Dollar trended broadly higher yesterday, with the safe-haven currency initially strengthening as a risk-adverse mood prevailed.
However the ‘Greenback’ then relinquished a good portion of these gains, triggered by a pullback in US Treasury yields.
All eyes will be on the publication of the US consumer price index when it is published later this afternoon. This could see the US Dollar surge as another acceleration of inflation is likely to reinforce Fed rate hike bets.
Canadian Dollar (CAD) Firms despite Sliding Oil Prices
The Canadian Dollar (CAD) fell in tandem with oil prices on Tuesday, although the ‘Loonie’s losses were capped ahead of the Bank of Canada’s (BoC) impending interest rate decision.
The BoC is widely expected to deliver a 75bps rate hike this afternoon. Will the aggressive hike, coupled with hawkish forward guidance propel CAD exchange rates higher?
Australian Dollar (AUD) Firms amid Modest Uptick in Risk Appetite
The Australian Dollar (AUD) ticked higher overnight on Tuesday, with a modest improvement in market risk appetite helping the ‘Aussie’ to reverse some of its losses from earlier in the week.
New Zealand Dollar (NZD) Rocked by RBNZ Growth Concerns
The New Zealand Dollar (NZD) fluctuated in overnight trade as the Reserve Bank of New Zealand (RBNZ) delivered its latest interest rate decision.
The RBNZ raised rates by 50bps as forecast, but its accompanying statement warned about near-term risks to growth, which triggered a temporary slump in the ‘Kiwi’.