Pound (GBP) Drops as Recession Forecast Worries Investors
The Pound (GBP) fell across the board yesterday after the EY Item Club – an influential business consultancy firm – said that the expected UK recession this year could be twice as bad as previously feared.
Adding to these concerns, the UK’s National Grid prepared to activate contingency plans as a cold snap strained Britain’s energy system.
Today, the UK’s flash PMIs could hurt the Pound. Economists expect them to reveal an ongoing contraction in the country’s private sector activity.
Euro (EUR) Falls during Upbeat Trade
The Euro (EUR) fell through yesterday’s European session, erasing overnight gains, as a risk-on mood saw the safer Euro struggle against its riskier peers.
A smaller-than-expected improvement in Eurozone consumer confidence added to EUR’s woes. The latest flash index printed at -20.9, rather than -20.
Turning to this morning, the Eurozone PMI scores improved more than forecast, with the bloc’s services sector returning to growth for the first time in six months. This could lift the Euro through today’s session.
US Dollar (USD) Mixed amid Treasury Yields and Risk Appetite
The US Dollar (USD) faced some choppy trade yesterday. An upbeat market mood weighed on the safe-haven currency while an uptick in US Treasury yields supported it.
Overall, USD slipped against its stronger peers and made modest gains against its weaker ones.
Later today, the US PMIs could cause some movement. Could a forecast improvement in service sector activity help the ‘Greenback’ gain ground?
Canadian Dollar (CAD) Directionless due to Lack of Data
The Canadian Dollar (CAD) was mixed yesterday, gaining against its weaker rivals but slipping elsewhere, as a lack of notable Canadian data left the ‘Loonie’ without a clear direction.
Canadian data remains in short supply today so oil prices may impact the crude-linked currency.
Australian Dollar (AUD) Wobbles amid Mixed Data
The Australian Dollar (AUD) wavered in a narrow range overnight, but managed to hold on to yesterday’s gains, amid mixed data releases. Australia’s PMIs exceeded forecasts, but the latest business confidence index came in lower than expected.
New Zealand Dollar (NZD) Firms despite PMI Miss
The New Zealand Dollar (NZD) managed to edge higher during last night’s trade, despite a weaker-than-expected services PMI. An upbeat market mood helped buoy the risk-sensitive ‘Kiwi’.