US Dollar Recovery Curtailed as US Slips Into a Technical Recession

Pound (GBP) Muted amid Political Uncertainty

The Pound (GBP) was trapped in a narrow range on Thursday as ongoing political uncertainty weighed on Sterling sentiment.

GBP exchange rates faced further pressure amid threats of a strike at the UK’s largest container port, for fear any industrial action could severely disrupt the economy.

Looking ahead, the Pound could face additional headwinds with the release of the UK’s consumer credit figures this morning. amid fears the cost of living crisis will have forced more households to borrow money to make ends meet.

Euro (EUR) Undermined by Energy Concerns

The Euro (EUR) trended lower again yesterday. The single currency running afoul of fresh concerns over Europe’s energy security.

EUR investors appear to be growing increasingly concerned that the Eurozone will face an energy crisis this winter as Russian gas exports to the continent slow to a trickle.

In the spotlight today will be the Eurozone’s latest GDP figures, which could see the Euro face fresh selling pressure if growth in the bloc stalled or even contracted in the second quarter.

US Dollar (USD) Recovery Tempered as US Slips into a Recession

The US Dollar (USD) initially firmed yesterday, amid suggestions the currency may have been oversold in the wake of the Federal Reserve’s interest rate decision on Wednesday.

However, this recovery was curtailed following the release of the latest US GDP figures. Growth in the second quarter unexpectedly contracted, plunging the US into a technical recession after a previous slump in Q1.

Coming up, the focus for USD investors today will be on the core PCE price index. Will another dip in the Fed’s preferred measure of inflation soften the US Dollar this afternoon?

Canadian Dollar (CAD) Subdued as Oil Prices Stall

The Canadian Dollar (CAD) traded on the back foot on Thursday. The commodity-linked currency struggling to attract support as oil prices stalled.

The publication of Canada’s latest GDP figures could act as a drag on the ‘Loonie’ this afternoon, if June’s preliminary figures report another fall in growth.

Australian Dollar (AUD) Buoyed by USD Weakness

The Australian Dollar (AUD) trended higher overnight on Thursday. A slump in the US Dollar bolstered market risk appetite and strengthened the appeal of the ‘Aussie’.

New Zealand Dollar (NZD) Ticks Up amid Cautious Optimism

The New Zealand Dollar (NZD) also firmed in overnight trade. The risk-sensitive ‘Kiwi’ also benefitting from an improving market mood.

Matthew Andrews

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