Pound (GBP) Spikes amid Fleeting Hopes of Stability
The Pound (GBP) fluctuated yesterday. Late in the morning, comments from Bank of England (BoE) Deputy Governor Ben Broadbent sparked a rally in the UK gilt market, alleviating fears about financial instability.
Sterling then extended its upside as Liz Truss resigned as UK Prime Minister. Her departure ends a tumultuous month, with investors hopeful that a more fiscally orthodox PM will take her place.
However, GBP couldn’t hold its gains. Markets remain worried about political uncertainty in the UK, with the Pound remaining as volatile as ever.
Turning to today, UK retail sales contracted far more than forecast last month, which may weigh on GBP moving forward. British political developments are also likely to continue impacting the Pound.
Euro (EUR) Slips as Ukraine Crisis Worsens
The Euro (EUR) fell against many of its peers yesterday as EUR investors remained downbeat about the Russia-Ukraine crisis.
The single currency’s negative correlation to a weaker US Dollar (USD) helped limited EUR’s losses.
Later this afternoon, economists expect the Eurozone consumer confidence report for this month to reveal another drop in morale. Such a result could dent the Euro.
US Dollar (USD) Drops as Risk Appetite Improves
The US Dollar slipped during yesterday’s session as a risk-on mood saw traders desert the safe-haven currency for its riskier peers.
However, the market mood shifted as global volatility continues, allowing USD to recoup some losses.
US data is scarce today, so risk appetite will likely continue to drive the US Dollar.
Canadian Dollar (CAD) Wavers Lower in Absence of Data
The commodity-tied Canadian Dollar (CAD) fluctuated yesterday, ticking lower against its stronger peers, amid a lack of data and mixed movement in the oil markets.
Looking ahead, Canada’s latest retail sales results are in focus. Could a modest recovery in sales be enough to lift the ‘Loonie’?
Australian Dollar (AUD) Mixed amid Market Turbulence
The Australian Dollar (AUD) wavered overnight as market volatility caused some erratic movement.
New Zealand Dollar (NZD) Wobbles as Risk Sentiment Shifts
The New Zealand Dollar (NZD) also fluctuated in overnight trade, with a shifting market mood affecting the risk-sensitive ‘Kiwi’.