Pound (GBP) Drops as UK Outlook Worsens
The Pound (GBP) slid yesterday as downbeat news from UK businesses added to the country’s grim economic outlook.
Marks & Spencer reported falling profits, Wetherspoons announced the sale of 39 of its pubs, and Made.com went into administration. With big UK businesses beginning to suffer amid contracting economic growth, Sterling dropped sharply.
Looking ahead, Bank of England (BoE) policymaker Silvana Tenreyro is due to speak. As a known dove, Tenreyro could advocate for a slower pace of interest rate rises, which would likely hurt the Pound.
Euro (EUR) Directionless amid Mixed Trade
The Euro (EUR) traded without a clear directional bias yesterday, with mixed factors playing on the single currency.
Hawkish comments from the European Central Bank (ECB) gave EUR a lift, while the currency’s negative correlation with the US Dollar (USD) stifled the upside.
With no notable data from the Eurozone out today, EUR could trade in relation to USD.
US Dollar (USD) Firms amid Jittery Market Mood
The safe-haven US Dollar gained ground yesterday amid a risk-off mood and increased expectations for more Federal Reserve rate rises.
The US midterm election also affected USD. With the results still too close to call, caution kept a lid on the Dollar’s gains.
US inflation is in the spotlight today. If headline and core inflation ease, as expected, Fed rate hike bets could collapse, thereby denting the US Dollar. A handful of Fed speeches through the afternoon could also impact USD.
Canadian Dollar (CAD) Rises alongside Bond Yields
The Canadian Dollar (CAD) found some success against its weaker peers yesterday as rising Canadian government bond yields boosted the ‘Loonie’.
Today, CAD investors may be looking ahead to a speech from Bank of Canada (BoC) Governor Tiff Macklem. If he hints at more hawkish action from the bank, the Canadian Dollar could climb.
Australian Dollar (AUD) Slips amid Risk Aversion
The Australian Dollar (AUD) softened overnight as a souring market mood sapped the appeal of the risk-sensitive currency.
New Zealand Dollar (NZD) Dented by Downbeat Market Mood
Likewise, the riskier New Zealand Dollar (NZD) ticked lower amid the gloomy sentiment among traders.