US Dollar (USD) Slides amid Midterm Elections
The US Dollar (USD) tumbled yesterday amid the US midterm elections. As analysts forecast sweeping gains for the Republicans, prospects of a gridlocked Congress cheered markets, thereby denting the safe-haven Dollar.
This optimism was boosted by some downbeat US data. With the American economy starting to slow, and Republicans potentially blocking Biden’s spending plans, the Federal Reserve may not raise interest rates as fast or far as expected.
Today, news about the election results could continue to drive USD. In the afternoon, a speech from Fed policymaker Thomas Barkin may also prompt movement.
Pound (GBP) Ebbs and Flows amid Shifting Risk Appetite
The Pound (GBP) initially softened yesterday as risk aversion swept markets, putting pressure on the increasingly risk-linked UK currency.
However, Sterling was able to recoup its losses in the afternoon. A bullish turnaround in markets lifted GBP, while hints of further interest rate rises from Bank of England (BoE) Chief Economist Huw Pill may also have boosted the Pound.
Turning to today, a lack of UK economic data could leave Sterling to trade without a clear direction. GBP investors may take their cues from domestic news.
Euro (EUR) Wavers amid Mixed Trading Signals
The Euro (EUR) was mixed yesterday, softening against its stronger peers, despite a recovery in Eurozone retail sales in September.
The single currency, often considered a safe investment, seemed to suffer as risk appetite returned to markets. In addition, ongoing Russia-Ukraine worries added to EUR’s woes.
With Eurozone data thin on the ground today, the Euro may trade according to its negative correlation with the US Dollar.
Canadian Dollar (CAD) Mixed amid Lack of Data
The Canadian Dollar (CAD) was mixed yesterday as a lack of economic data from Canada left the ‘Loonie’ vulnerable to market volatility.
Notable Canadian data remains thin on the ground today. As a result, CAD may trade without a clear direction once again.
Australian Dollar (AUD) Resists Losses despite Risk-Off Mood
The Australian Dollar (AUD) fluctuated in overnight trade, moving sideways overall. A downbeat market mood weighed on the ‘Aussie’ while hopes of monetary policy easing by the People’s Bank of China (PBoC) prevented losses for the China-proxy currency.
New Zealand Dollar (NZD) Slips as Sentiment Sours
The risk-sensitive New Zealand Dollar (NZD) declined overnight as a souring market mood pushed the ‘Kiwi’ lower.