Pound (GBP) Firms as GDP Exceeds Forecasts
The Pound (GBP) rose on Friday after the UK’s latest GDP report beat forecasts.
In November, the British economy grew by 0.1%, rather than shrinking 0.2% as economists had expected. This raised hopes that the UK’s recession may not be as severe as feared, which in turn lifted GBP.
Turning to today, a lack of UK economic data means Sterling may trade in relation to domestic British headlines.
Euro (EUR) Suffers Profit-Taking
The Euro (EUR) initially stumbled at the end of last week, despite upbeat Eurozone economic data, as some currency traders sought to cash in on EUR’s strong rally through the week.
The common currency was able to recoup losses against some of its peers later on as a decline in the US Dollar (USD) lifted EUR, due to their negative trading correlation.
Earlier this morning, new data showed that German wholesale prices fell more than forecast in December. This could pressure the single currency through today’s trade, as it may dampen expectations of European Central Bank (ECB) interest rate rises.
US Dollar (USD) Sheds Gains as Market Mood Improves
The US Dollar initially firmed on Friday as a souring market sentiment and an uptick in Treasury bond yields lifted the safe-haven currency.
However, USD slipped in the afternoon, despite a larger-than-forecast improvement in the University of Michigan consumer sentiment indicator, as the market mood improved.
Looking ahead, a lack of American economic data today means the ‘Greenback’ may be driven by risk appetite.
Canadian Dollar (CAD) Slips as Bond Yields Fall
The Canadian Dollar (CAD) wavered lower on Friday, with the ‘Loonie’ trading in tandem with Canadian government bond yields.
With data thin on the ground today, bond yields and oil prices could impact the commodity-linked Canadian Dollar.
Australian Dollar (AUD) Ticks Higher amid Upbeat Trade
The risk-sensitive Australian Dollar (AUD) initially rose overnight before trimming its gains as the market mood soured slightly.
New Zealand Dollar (NZD) Makes Modest Gains amid Risk-On Mood
Likewise, the New Zealand Dollar (NZD) found success through the first part of overnight trade before ceding some ground in the latter part of the session.