Pound (GBP) Drops as Services PMI Misses Forecasts
The Pound (GBP) slumped during yesterday’s session after the UK’s latest services PMI revealed a deeper-than-expected contraction.
With the UK’s economic downturn worsening at the start of 2023, fears of a coming recession sparked a selloff in GBP.
Sterling may face limited movement today amid a lack of notable British economic data. If domestic headlines underscore the troubles the UK economy faces, the Pound could suffer further losses.
Euro (EUR) Struggles despite Upbeat PMIs
The Euro (EUR) fluctuated in a narrow range yesterday as better-than-expected PMI reports failed to lift the common currency.
Although both manufacturing and service sector activity exceeded forecasts, with the latter returning to growth for the first time in six months, the Euro struggled to gain support.
This morning, Germany’s latest business climate indicator could buoy EUR exchange rates; economists expect the gauge to improve for a fourth consecutive month.
US Dollar (USD) Wobbles amid Shifting Market Mood
The US Dollar (USD) was also mixed yesterday, with the safe-haven currency initially finding modest success amid a cautious market mood.
However, USD trimmed its gains later in the session. Above-forecast US PMIs seemed to cheer markets, thereby weighing on the safer ‘Greenback’. Additionally, US Treasury yields declined, which dragged on the US Dollar.
Amid today’s scarcity of US economic data, risk appetite could drive the American currency’s movements.
Canadian Dollar (CAD) Mixed alongside USD
The Canadian Dollar (CAD) saw some turbulence yesterday, with the ‘Loonie’ trading true to its increasingly positive correlation with the US Dollar.
Today, the Bank of Canada (BoC) interest rate decision is in the spotlight for CAD investors. Will the bank signal a further slowing of its tightening cycle, thereby hurting the Canadian Dollar?
Australian Dollar (AUD) Jumps as Inflation Exceeds Forecasts
The Australian Dollar (AUD) leapt higher overnight after Australian inflation exceeded forecasts. This prompted bets on further interest rate rises from the Reserve Bank of Australia (RBA), which in turn boosted the ‘Aussie’.
New Zealand Dollar (NZD) Slips on Softer RBNZ Expectations
Meanwhile, the New Zealand Dollar (NZD) slipped lower during last night’s trade as New Zealand’s latest inflation rate reading disappointed NZD bulls. Inflation slowed quarter on quarter in the final three months of 2022, putting less pressure on the Reserve Bank of New Zealand (RBNZ) to continue hiking rates.