Pound (GBP) Mixed amid Risk-On Mood
The Pound (GBP) was mixed yesterday, rising against its safer peers but losing ground elsewhere amid a risk-on market mood.
Fresh evidence that the UK cost-of-living crisis was worsening may have capped the Pound’s potential. Credit card borrowing jumped in November, suggesting that British households are taking on more debt to cope with soaring costs.
Later this morning, the UK’s final services PMI could impact GBP exchange rates. If it confirms an improvement, Sterling could strengthen. However, the Pound will likely fall if the final score is revised lower.
Euro (EUR) Stumbles despite Upwardly Revised PMI
The Euro (EUR) slipped yesterday, despite the Eurozone’s final services PMI printing higher than preliminary estimates.
An upbeat market mood contributed to the safer Euro’s downside, while signs within the PMI report of easing inflation may have dampened interest rate rise expectations from the European Central Bank (ECB), adding to the common currency’s losses.
Turning to today, the latest Eurozone PPI could dent EUR. Another monthly decline in producer prices may further temper market rate hike expectations.
US Dollar (USD) Falls amid Risk-On Trade
The safe-haven US Dollar (USD) fell yesterday amid a positive market mood and a decline in US Treasury bond yields. A deepening contraction in US manufacturing activity, revealed by the ISM PMI, added to USD’s losses.
The Federal Open Market Committee (FOMC) meeting minutes seemed to have little impact on the ‘Greenback’ yesterday evening, as they revealed no new information.
Last month’s ADP employment change figures could drive USD movement today. The US Dollar could rise if the report suggests that the US labour market remains strong.
Canadian Dollar (CAD) Firms despite Headwinds
The crude-linked Canadian Dollar (CAD) rose yesterday, with no clear catalyst for the movement. Oil prices ticked lower and Canadian government bond yields were subdued.
Looking ahead, could an expected narrowing of Canada’s trade surplus hurt the ‘Loonie’ later this afternoon?
Australian Dollar (AUD) Slips without Clear Catalyst
The Australian Dollar (AUD) retreated in overnight trade, without any clear factor driving the movement.
New Zealand Dollar (NZD) Declines despite Upbeat Mood
Likewise, the New Zealand Dollar (NZD) fell overnight despite a risk-on market mood.