US Dollar (USD) Slips ahead of US Inflation
The US Dollar (USD) wavered lower during yesterday’s session as a mixed market mood left the safe-haven currency without much support.
Additionally, USD investors were holding back from placing any significant bets ahead of today’s inflation data.
Today, markets are braced for July’s US inflation rate, due to be released this afternoon. If inflation exceeds forecasts then it may prompt the Federal Reserve to continue with steep interest rate rises, which in turn would likely see USD rise.
Pound (GBP) Undermined by Energy Bill Fears
The Pound (GBP) initially ticked higher against many of its peers yesterday, perhaps boosted by comments from the Bank of England’s (BoE) Dave Ramsden. Speaking to Reuters, Ramsden hinted that further rate hikes were likely.
However, troubling news about the UK economy trimmed GBP’s gains. In particular, investors were concerned about the latest forecasts for energy bills, which are set to exceed £4,200 per year in January.
Turning to today’s session, worries about the worsening UK cost-of-living crisis could continue to weigh on Sterling. July’s US inflation figures could also cause some movement, particularly if they affect global risk appetite.
Euro (EUR) Firms on USD Weakness
The Euro (EUR) strengthened yesterday as the single currency enjoyed its strong negative correlation to the US Dollar, which witnessed broad-based selling pressure.
EUR may have found its upside capped, however, amid ongoing concerns about the Eurozone economy. A recent report found that Germany – Europe’s largest economy – could lose €265bn by 2030 due to the Russia-Ukraine war.
Looking ahead, EUR may once again trade on its correlation with USD. The latest American inflation rate figures could have a significant impact on the single currency.
Canadian Dollar (CAD) Dips as Crude Prices Waver
The Canadian Dollar (CAD) fell yesterday as some fluctuations in the oil market failed to boost the commodity-linked currency.
Today, the ‘Loonie’ may continue to be influenced by oil price dynamics.
Australian Dollar (AUD) Slips amid Risk-Off Mood
The Australian Dollar (AUD) wavered last night, heading slightly lower overall, as a downbeat mood in Asian markets weighed on the risk-sensitive currency.
New Zealand Dollar (NZD) Edges Up despite Gloomy Sentiment
The New Zealand Dollar (NZD), however, managed to trend upwards overnight, without a clear catalyst for the movement.