Pound (GBP) Licks Wounds following Last Week’s Sell-Off
The Pound (GBP) had mixed success yesterday, slipping against its riskier peers but rising elsewhere, as an upbeat market mood supported the UK currency.
Markets seemed hopeful that the bleak forecasts from the Bank of England (BoE) last week could prove wrong. The BoE’s gloomy outlook did not factor in any additional fiscal support, which the next Prime Minister – whether Liz Truss or Rishi Sunak – will almost certainly bring in.
For the remainder of the day, the lack of UK data may see Sterling driven by risk appetite once again.
Euro (EUR) Ticks Lower in Absence of Data
The Euro (EUR) softened against many of its peers on Monday as a lack of Eurozone data left the single currency vulnerable to losses.
While a pullback in the US Dollar (USD) may have cushioned EUR’s downside, due to the currencies’ negative correlation, ongoing worries about EU-Russia tensions pressured the Euro.
A lack of notable Eurozone data today could see the single currency remain subdued.
US Dollar (USD) Declines as Market Mood Improves
The US Dollar fell across the board yesterday as a recovery in risk appetite saw traders abandon the safe-haven currency in favour of higher-yielding investments.
The turnaround in market mood comes following recent positive economic data releases from the US and China – the world’s two largest economies.
Turning to today, risk appetite may remain a defining factor for USD exchange rates. Data-wise, the latest US economic optimism index this afternoon could boost the ‘Greenback’ if it shows an improvement.
Canadian Dollar (CAD) Rises in Spite of Fluctuating Oil
The Canadian Dollar (CAD) strengthened yesterday, despite fluctuating crude prices, without a clear fundamental reason for the movement.
Looking ahead, shifts in the oil market may influence the crude-linked ‘Loonie’ today.
Australian Dollar (AUD) Stumbles as Consumer Confidence Drops
The Australian Dollar (AUD) wavered lower overnight following some mixed data. While business confidence showed a marked improvement, consumer confidence unexpectedly declined to a two-year low.
New Zealand Dollar (NZD) Falls on AUD Correlation
The New Zealand Dollar (NZD) also fell in overnight trade due to its positive correlation with the ‘Aussie’ Dollar. A mixed market mood failed to provide the risk-sensitive ‘Kiwi’ with much support.