US Dollar (USD) Nosedives amid Cooling US Inflation
As a result, markets scaled back bets for Federal Reserve interest rate rises. This, paired with the subsequent rally in market mood, dragged the ‘Greenback’ down.
Today’s US PPI data could potentially push USD even lower as economists expect it to confirm a cooldown in prices last month.
Pound (GBP) Mixed as UK Grapples with Surging Energy Costs
The Pound (GBP) traded without a clear direction yesterday as GBP investors remained worried about the UK’s worsening cost-of-living crisis.
News that Liz Truss – the frontrunner in the Conservative leadership contest – is open to giving households further cost-of-living payments may have given GBP a modest lift.
Looking ahead, an ongoing lack of UK economic data could mean movement in Sterling remains subdued today. GBP traders will likely take their cues from domestic UK news.
Euro (EUR) Subdued despite USD Sell-Off
The Euro (EUR) struggled to capitalise on yesterday’s slump in USD, despite EUR’s negative correlation to the US currency.
EUR rose against its North American counterparts, but lost ground elsewhere, as Europe’s ongoing gas crisis weighed on the Euro.
In the absence of Eurozone data today, movement in the single currency may be limited.
Canadian Dollar (CAD) Drops alongside USD
The Canadian Dollar (CAD) fell in tandem with the US Dollar yesterday after the fall in US inflation saw Canadian bond yields plunge.
Today, the commodity-linked ‘Loonie’ could trade primarily on movements in the oil market.
Australian Dollar (AUD) Sustains Yesterday’s Post-Inflation Gains
The Australian Dollar (AUD) wavered sideways overnight, after hitting multi-week highs yesterday following the US inflation miss, amid a risk-on market mood.
New Zealand Dollar (NZD) Holds Near Multi-Month Highs amid Upbeat Mood
Likewise, the New Zealand Dollar (NZD) rose to multi-month highs yesterday and managed to hold most of these gains through overnight trade.