Canadian Dollar (CAD) Slides following BoC Decision
The Canadian Dollar (CAD) slumped yesterday after the Bank of Canada (BoC) interest rate decision.
The bank raised rates by 25bps but said it would likely pause its tightening cycle for the time being. The prospect of lower rates sapped CAD’s appeal.
Today, oil prices could drive movement in the commodity-linked ‘Loonie’.
Pound (GBP) Recovers amid BoE Rate Rise Bets
After a rocky start to the session, the Pound (GBP) managed to rebound yesterday, posting modest gains against many of its peers.
The upside came as markets continued to bet on another 50bps interest rate hike from the Bank of England (BoE) ahead of its policy decision in one week’s time. However, UK economic concerns capped GBP’s gains.
Turning to today’s session, the Confederation of British Industry’s (CBI) distributive trades survey is forecast to decline, which could put some pressure on the Pound.
Euro (EUR) Dented by Russia-Ukraine Tensions
The Euro (EUR) stumbled yesterday as fears of a possible escalation in the Russia-Ukraine crisis worried EUR investors.
Germany confirmed that it would supply battle tanks to Ukraine, with the Russian embassy in Germany accusing Berlin of taking the war to ‘a new level’.
Eurozone data is in short supply today, so Russia-Ukraine worries may continue to impact the Euro. The single currency could slip if tensions continue to bubble.
US Dollar (USD) Mixed amid Thin Trading Conditions
The US Dollar (USD) moved without a clear directional bias yesterday amid thin trading conditions ahead of key US data today and tomorrow.
Mixed movement in the US bond markets and a fairly tepid market mood added to USD’s unclear trajectory.
Looking ahead, a trio of data releases later could drive USD movement. Most impactful will likely be the GDP growth rate for the fourth quarter of 2022. With growth expected to slow but remain positive, hopes of a ‘soft landing’ following Federal Reserve rate hikes may cheer markets and dent the US Dollar.
Australian Dollar (AUD) Firms as Risk Appetite Improves
The Australian Dollar (AUD) edged higher overnight as a fairly upbeat market mood lent the risk-sensitive ‘Aussie’ some support.
New Zealand Dollar (NZD) Rises amid Upbeat Trade
Likewise, the New Zealand Dollar (NZD) ticked higher in overnight trade amid the improvement in market sentiment.