US Dollar (USD) Wavers Lower amid Shifting Market Mood
A risk-off mood saw the safe-haven US Dollar (USD) initially find some success yesterday. An uptick in US Treasury yields also aided USD.
The ‘Greenback’ trimmed its gains in the afternoon, however, as the market mood improved. Upbeat US economic data relieved fears of a recession in the world’s largest economy, with the subsequent increase in risk appetite denting the US Dollar.
Market sentiment may continue to drive USD movement through today’s session. Later on, a speech by the Fed’s Patrick Harker could dent the US Dollar if the policymaker advocates a slower pace of rate hikes moving forward.
Pound (GBP) Wobbles Near One-Month Highs
The Pound (GBP) wavered yesterday, but managed to hold near monthly highs against many of its peers as Bank of England (BoE) interest rate rise bets continued to underpin the currency.
Earlier in the week strong wage growth and stickier inflation figures raised market expectations for further BoE rate hikes. This kept the Pound afloat through yesterday’s session.
This morning, UK retail sales revealed an unexpected slump in December. Sales growth contracted by 1%, rather than growing 0.5%, which could once again raise recession fears. Will this weigh on the Pound through today’s trade?
Euro (EUR) Posts Meagre Gains following Hawkish ECB
The Euro (EUR) initially strengthened yesterday as hawkish comments from policymakers at the European Central Bank (ECB) lifted the common currency.
However, a return of risk appetite in the afternoon saw the safer Euro slip back against its riskier peers.
ECB President Christine Lagarde is due to speak again today, after addressing the World Economic Forum (WEF) yesterday. Any more hawkish remarks could provide further support for EUR exchange rates.
Canadian Dollar (CAD) Buoyed by Rising Oil Prices
The Canadian Dollar (CAD) fluctuated yesterday, achieving modest gains in the afternoon as a rise in oil prices buoyed the commodity-linked currency.
Turning to today, Canada’s November retail sales data could dent the ‘Loonie’. Economists expect a 0.5% drop in domestic sales.
Australian Dollar (AUD) Rises amid Risk-On Trade
An upbeat market mood saw the risk-sensitive Australian Dollar (AUD) climb higher during overnight trade.
New Zealand Dollar (NZD) Enjoys Upbeat Market Mood
The riskier New Zealand Dollar (NZD) also made gains last night, as the bullish sentiment lifted the ‘Kiwi’.