Euro (EUR) Wavers Lower amid Gas Supply Fears
The Euro (EUR) fluctuated yesterday, trending lower overall, as gas supply fears undermined the single currency ahead of the European Central Bank’s (ECB) interest rate decision.
Expectations of a rate hike from the ECB provided EUR with some support, along with hopes that Russian gas supplies through the Nord Stream 1 pipeline would resume from today. However, Vladimir Putin cast doubt on whether gas flows would restart, thereby denting the Euro.
Gas flows have resumed today, to the relief of EUR investors. Attention now turns to the ECB rate decision. Amid speculation that the bank is considering a 50-bp rate rise, could a smaller hike see the Euro slip?
Pound (GBP) Volatile following UK CPI
The Pound (GBP) experienced some volatility yesterday as markets reacted to the UK’s latest inflation data.
Headline inflation printed slightly higher than expected while core inflation eased in line with forecasts. The results may have slightly boosted Bank of England (BoE) rate rise bets, however they also exacerbated cost-of-living concerns.
This morning’s public sector borrowing figures show that the public finances are in a worse condition than expected as debt interest payments hit record highs. This is weighing on Sterling this morning.
US Dollar (USD) Ticks Higher amid Risk-Off Trade
The US Dollar (USD) wavered higher yesterday as safe-haven flows helped the American currency snap its two-day losing streak.
As fears over Europe’s worsening energy crisis rattled markets, the souring market sentiment boosted the appeal of the safe-haven US Dollar.
Today’s US initial jobless claims could impact the ‘Greenback’ if they surprise markets. Otherwise, risk appetite may continue to drive USD movement.
Canadian Dollar (CAD) Buoyed by Uptick in Oil
The Canadian Dollar (CAD) was choppy during yesterday’s trade amid widespread volatility, while below-forecast inflation caused the currency to dip. However, a jump in oil prices in the afternoon helped the crude-linked ‘Loonie’ rebound against many of its peers.
With market-moving Canadian data thin on the ground today, oil price dynamics may continue to drive CAD.
Australian Dollar (AUD) Trades Sideways amid Mixed Mood
The Australian Dollar (AUD) wavered sideways in overnight trade as a mixed mood in Asian markets left the risk-sensitive currency without a clear direction.
New Zealand Dollar (NZD) Dented by Surprise Trade Deficit
The New Zealand Dollar (NZD) ticked lower overnight as New Zealand’s latest trade data unexpectedly showed a deficit.