Pound (GBP) Slips amid Ongoing Political Instability
The Pound (GBP) fell against the majority of its peers on Friday as the political uncertainty of the Tory leadership contest continued to dampen Sterling’s appeal.
Additionally, new data showed a 40% jump in company insolvencies in England and Wales last month. The latest figures indicate just how badly the economic uncertainty of Covid, Brexit and Russia’s invasion of Ukraine is damaging UK business.
This morning, a speech from Bank of England (BoE) policymaker Michael Saunders could impact the Pound. If Saunders raises expectations for a 50-bp rate rise at the bank’s next meeting, Sterling could strengthen.
Euro (EUR) Enjoys USD Pullback
The Euro (EUR) found some success on Friday, rising against the Pound and the US Dollar (USD) but struggling to gain against its stronger peers.
The upside came courtesy of EUR’s negative correlation with USD, which weakened. In addition, an upbeat mood in European markets and better-than-expected Eurozone trade figures supported the single currency.
Turning to today, there’s no notable economic data out of the Eurozone. As a result, the Euro could struggle for a clear direction.
US Dollar (USD) Softens as Fed Plays Down 1% Rate Rise
The US Dollar retreated at the end of the week despite strong retail sales and consumer sentiment reports.
The downside came as Federal Reserve officials pushed back on expectations of a 100-bp rate hike. Additionally, a recovering appetite for risk dampened the safe-haven Dollar’s appeal.
With little US data due out today, risk appetite could be the driving factor behind movement in USD exchange rates.
Canadian Dollar (CAD) Mixed despite Modest Rise in Oil
The Canadian Dollar (CAD) was mixed on Friday as a modest uptick in oil prices wasn’t enough to provide the crude-linked currency with a significant upside.
Crude prices are climbing today after Joe Biden’s meeting with Saudi Arabian officials failed to secure an increase in oil output. This could see CAD rise.
Australian Dollar (AUD) Wobbles despite Upbeat Market Mood
The risk-sensitive Australian Dollar (AUD) wavered in overnight trade, in spite of a fairly positive market mood.
New Zealand Dollar (NZD) Wavers Lower in Spite of Hot Inflation Data
The New Zealand Dollar (NZD) also fluctuated overnight, trending lower overall. The downside came despite higher-than-forecast inflation data, which increases the likelihood of more rate hikes from the Reserve Bank of New Zealand (RBNZ).