US Dollar (USD) Ticks Higher amid Market Caution
The US Dollar (USD) gained ground yesterday, although the upside was rather bumpy, as a downbeat market mood boosted the safe-haven currency’s appeal.
Additionally, an uptick in US Treasury yields lent the ‘Greenback’ some support.
Later this afternoon, the US consumer confidence indicator for January is due out. Could a rise in consumer morale boost USD?
Pound (GBP) Subdued amid Lack of Data
The Pound (GBP) was muted on Monday, softening against many of its safer peers amid a risk-off mood and a lack of UK economic data.
However, expectations of another half-point interest rate hike at the Bank of England’s (BoE) upcoming meeting this week limited Sterling’s losses.
This morning, new lending data is out for GBP. If the reports shows that British consumers continue to rack up debt to deal with the rising cost of living, the Pound could face some selling pressure.
Euro (EUR) Firms as Economic Sentiment Improves
The Euro (EUR) posted strong gains at the start of this week’s session. A better-than-forecast economic sentiment index from the Eurozone gave EUR a lift, while bets on a hawkish European Central Bank (ECB) decision later in the week added to the upside.
Later in the afternoon, however, the common currency trimmed its gains. Russia-Ukraine worries and fears of a winter recession in Germany dented the Euro.
The focus for EUR investors this morning is the Eurozone’s flash GDP growth rate for the fourth quarter of 2022. The data could prompt a downside in the single currency, as economists expect it to reveal an economic contraction in the final three months of last year.
Canadian Dollar (CAD) Lacks Direction amid Oil Volatility
The Canadian Dollar (CAD) was mixed yesterday as some volatility in the oil market left the crude-linked ‘Loonie’ to trade without a clear directional bias.
Canada’s latest GDP data today could prompt some movement. Analysts expect another month of modest growth in December; any surprise results could have a big impact on CAD.
Australian Dollar (AUD) Slips following Slump in Retail Sales
A larger-than-forecast decline in Australia’s latest retail sales figures pushed the Australian Dollar (AUD) lower last night. Sales slumped by 3.9% in December, rather than the expected contraction of 0.3%.
New Zealand Dollar (NZD) Drops amid Risk-Off Trade
The risk-sensitive New Zealand Dollar (NZD) also fell in overnight trade amid a downbeat market mood. Adding to the pressure on the ‘Kiwi’, New Zealand’s new Prime Minister Chris Hipkins announced a cabinet reshuffle.