Euro (EUR) Slips as German Inflation Cools
The Euro (EUR) fluctuated yesterday, ticking lower overall, despite a slightly stronger-than-forecast recovery in Eurozone economic sentiment.
The downside came as Germany’s preliminary inflation rate reading printed below estimates. This increased the likelihood that the European Central Bank (ECB) will opt for a smaller 50bps interest rate rise at its next meeting, which in turn hurt EUR.
Today, the Eurozone inflation rate is in the spotlight. If it signals easing inflationary pressures, as expected, then the Euro could extend its losses as investors further rein in rate hike bets.
Pound (GBP) Fluctuates in Choppy Trade
The Pound (GBP) traded without a clear directional bias yesterday, as a shifting market mood triggered some choppy trade in the increasingly risk-sensitive UK currency. Fluctuations in British government bond yields added to the mixed movement.
Additionally, the latest UK credit and mortgage data showed that lending had cooled, indicating an economic slowdown and keeping a lid on GBP.
This morning, concerns about the UK economy seem to be weighing on Sterling. Two separate surveys have recorded a drop in business confidence, while the latest food inflation data shows that price pressures continue to surge, tightening the squeeze on consumers.
US Dollar (USD) Recoups Losses as Sentiment Sours
A risk-on mood initially saw the safe-haven US Dollar (USD) slip yesterday. However, risk appetite soured later in the session, helping USD recover.
The US Dollar found its gains capped, though, after America’s latest consumer confidence indicator dropped to a four-month low.
Looking ahead, US jobs data could influence USD, with expected strong results potentially supporting the currency. In addition, Federal Reserve Chair Jerome Powell is due to speak in the evening. Any hawkish signals could prompt an upside in the US Dollar.
Canadian Dollar (CAD) Dips amid GDP Results
The Canadian Dollar (CAD) fell sharply yesterday. Although Canadian GDP data beat forecasts, it did indicate that the country’s economy had slowed significantly in September and stalled in October.
Notable Canadian data is thin on the ground today. Therefore, movements in the commodity markets could impact the resource-linked ‘Loonie’.
Australian Dollar (AUD) Firms despite Poor Data
The Australian Dollar (AUD) edged higher overnight, despite disappointing Australian inflation and Chinese business data. The upside seemed to come courtesy of a cautiously optimistic market mood, which lifted the risk-sensitive ‘Aussie’.
New Zealand Dollar (NZD) Rises amid Risk-On Trade
The New Zealand Dollar (NZD) also shrugged off poor economic data to gain ground last night. Although New Zealand business confidence unexpectedly slumped, the risky ‘Kiwi’ rose amid the upbeat trading sentiment.