Pound (GBP) Crumbles as UK GDP Revised Down
The Pound (GBP) fell further yesterday as the third-quarter GDP data was revised lower than preliminary readings.
The UK’s economy shrank by 0.3% in Q3, stoking fears among investors of a deeper recession than had been previously expected.
Data releases are thin for today, meaning GBP investors may focus on domestic headlines. With postal workers scheduled to strike today, news of how this could impact UK businesses may weaken Sterling.
Euro (EUR) Supported by Hawkish ECB Policymakers
The Euro (EUR) strengthened yesterday, with European Central Bank (ECB) policymakers reaffirming the need to curtail inflation within the bloc.
Speaking to Le Monde, ECB Vice-President Luis de Guindos stated that ‘increases of 50bps may become the new norm.’ As such, EUR investors cheered the possibility of further policy tightening.
With data remaining scarce, further hawkish comments from ECB policymakers could boost the single currency. Alternatively, any signs of escalation in the Russia-Ukraine war could weaken EUR.
US Dollar (USD) Rises as GDP Data Revised Upwards
Contrasted against Sterling, the US Dollar (USD) strengthened yesterday as the US third-quarter GDP growth rate was revised upwards.
While preliminary readings expected growth of 2.9%, the revision upgraded this to 3.2%, showing the US economy was in good health. This in turn boosted Federal Reserve interest rate rise bets.
Today, investors will be focused on the US core PCE price index. As this is the Fed’s preferred indicator of inflation, an expected fall may weaken the ‘Greenback’ by paring back rate hike bets.
Canadian Dollar (CAD) Underpinned by Uptick in Government Bonds
The Canadian Dollar (CAD) rose against weaker peers yesterday, as an uptick in Canadian government bonds supported the ‘Loonie’. However, fluctuations in oil prices prevented stronger gains.
Canada’s GDP data for October is due today. Any unexpected results could trigger movement in the ‘Loonie’.
Australian Dollar (AUD) Dragged Down by Chinese Covid Concerns
The Australian Dollar (AUD) fell overnight as further concerns over China’s rising Covid cases continued to wound the Chinese proxy-currency.
New Zealand Dollar (NZD) Dented by Risk-Off Market Mood
Last night, the New Zealand Dollar (NZD) slipped as the market mood turned sour, leaving the risk-sensitive ‘Kiwi’ without much support.