Pound (GBP) Firms as UK Stocks Rise
The Pound (GBP) rallied through yesterday’s European session, amid an upswing in UK stocks as traders returned from Christmas break.
The increasingly risk-sensitive Sterling was also supported by a prevailing risk-on mood.
Turning to today’s session, the focus for GBP is likely to be on any headlines pertaining to ongoing UK industrial action. Reports suggest a deal to end the rail strikes may be close. Confirmation of which could reflect positively on the Pound.
Euro (EUR) Weakens in Thin Trade
The Euro (EUR) was placed on the back foot on Wednesday as holiday-thinned trade left the single currency with limited support.
The single currency was therefore left vulnerable to Ukraine concerns. The Kremlin once again rejected Ukrainian President Volodymyr Zelenskiy’s 10-point peace plan.
Reports that Russia is gearing up for another ‘partial mobilisation’ in early 2023 could leave the Euro vulnerable to further losses today, amid the continued lull in EUR data.
US Dollar (USD) Slides in Risk-On Trade
The US Dollar (USD) slumped through yesterday’s European trading session. Demand for the safe-haven currency being undermined by a prevailing risk-on mood. China announced earlier in the week that it would continue to lift Covid restrictions.
However, the ‘Greenback’ then bounced back later in the evening. Concerns over the rapid spread of Covid in China prompted several countries to impose restrictions on visitors from China.
The only data release of note today will be the latest US initial jobless claims. Will a rise in new unemployment claims last week lead the US Dollar to give up more ground this afternoon?
Canadian Dollar (CAD) Firms despite Muted Oil Prices
The Canadian Dollar (CAD) ticked higher on Wednesday, with the commodity linked currency rising in spite of oil prices flatlining through the European session.
Australian Dollar (AUD) Dented by China Covid Concerns
The Australian Dollar (AUD) trended lower overnight on Wednesday. AUD investors were notably less bullish as they reassessed China’s reopening as Western countries expressed alarm at the possible surge in infections and potential emergence of new variants.
New Zealand Dollar (NZD) Wavers in Cautious Trade
The New Zealand Dollar’s (NZD) fluctuated in overnight trade as souring risk appetite forced the ‘Kiwi’ to relinquish its initial gains.