Pound (GBP) Rebounds from Post-BoE Slump
The Pound (GBP) rallied yesterday, recovering some of the losses it suffered last week after the Bank of England (BoE) declared that the UK was in a recession.
Sterling seemed to enjoy some dip-buying as investors sought to snap up the oversold currency. In addition, an improving market mood boosted the increasingly risk-sensitive Pound.
This morning, a speech from BoE Chief Economist Huw Pill could impact the Pound. If Pill highlights the UK’s dismal economic outlook, Sterling could stumble.
Euro (EUR) Undermined by Ukraine Worries
The Euro (EUR) found some support yesterday, rising against its weaker peers, after German industrial production figures exceeded forecasts.
However, Russia-Ukraine fears undermined EUR. Ukraine braced for blackouts as President Volodymyr Zelenskiy warned of more ‘mass attacks’ on energy infrastructure.
Later this morning, an expected recovery in Eurozone retail sales could lift the single currency. However, any more downbeat news from Ukraine could limit the Euro’s gains.
US Dollar (USD) Stumbles amid Lower Fed Expectations
The US Dollar (USD) fell yesterday as investors continued to rein in their expectations of further aggressive interest rate rises from the Federal Reserve following Friday’s jobs data.
In addition, the market mood remained upbeat, thereby sapping the appeal of the safe-haven US Dollar.
Looking ahead, this afternoon’s business optimism index could support the ‘Greenback’, as forecasters predict a rise in morale among US firms. Until then, risk appetite could continue to drive USD.
Canadian Dollar (CAD) Drops despite Rising Oil Prices
The commodity-linked Canadian Dollar (CAD) slipped yesterday, despite rising oil prices, due to the currency’s increasingly strong correlation with the US Dollar.
An ongoing lack of Canadian economic data could leave the ‘Loonie’ to trade without a clear direction today.
Australian Dollar (AUD) Muted amid Data Misses
The Australian Dollar (AUD) was subdued in overnight trade after business and consumer confidence in Australia both declined more than forecast.
New Zealand Dollar (NZD) Softens as Market Mood Sours
The New Zealand Dollar (NZD) was also muted overnight, with a souring market sentiment putting pressure on the risk-sensitive ‘Kiwi’.