Pound (GBP) Dented as High Inflation Spooks Investors
The Pound (GBP) slipped yesterday after UK inflation exceeded forecasts, rising from 9.9% back to its 40-year high of 10.1%.
Rather than firming on expectations of aggressive action from the Bank of England (BoE), Sterling slipped as investors grew increasingly concerned about the state of the public finances and the cost-of-living crisis.
Following last night’s chaotic vote in the House of Commons, commentators are speculating about the future of Prime Minister Liz Truss. Political volatility could drive Sterling today.
Euro (EUR) Falls as CPI Dampens Rate Rise Bets
The Euro (EUR) fell against the majority of its peers yesterday after Eurozone inflation printed below preliminary estimates. This slightly dampened European Central Bank (ECB) rate rise bets, thereby pressuring the single currency.
In addition, more troubling news about the Russia-Ukraine war worried EUR investors. Russia has intensified its attacks in recent days, raising fears that the conflict is far from over.
Amid a lack of market-moving Eurozone data today, news of Russia’s ongoing invasion could affect the Euro.
US Dollar (USD) Firms as Risk Aversion Prevails
The US Dollar (USD) strengthened yesterday as a risk-off mood swept markets, boosting the appeal of the safe-haven currency.
Political chaos in the UK, worries about an escalation in the Russia-Ukraine war, and growth concerns from China all weighed on the global market mood.
Later this evening, four Federal Reserve officials are due to speak. If policymakers continue to signal aggressive interest rate rises, the ‘Greenback’ could climb.
Canadian Dollar (CAD) Climbs on Oil Prices and CPI
The Canadian Dollar (CAD) firmed yesterday, with the oil-linked ‘Loonie’ enjoying a rise in crude prices and hotter-than-expected Canadian inflation.
Today, a lack of Canadian economic data could leave the commodity-linked ‘Loonie’ to trade on oil price dynamics.
Australian Dollar (AUD) Wavers amid Shifting Market Mood
The risk-sensitive Australian Dollar (AUD) initially dipped overnight amid a risk-off mood and mixed employment data. However, the ‘Aussie’ managed to recoup some losses as the market mood improved.
New Zealand Dollar (NZD) Loses Ground in Choppy Trade
Likewise, the New Zealand Dollar (NZD) regained some losses towards the end of the overnight session as sentiment improved, though it ticked lower overall.