Pound (GBP) Firms following More Upbeat Economic Report
The Pound (GBP) strengthened yesterday amid a slightly more upbeat outlook for the UK economy.
The National Institute for Economic and Social Research (NIESR) released its latest economic outlook for the UK, in which it said the country is ‘likely to avoid’ a recession this year.
Trade in the Pound could be muted today as investors await tomorrow’s vital fourth-quarter GDP data. In the meantime, domestic headlines could be the main driver of GBP movement.
Euro (EUR) Mixed amid Lack of Data
The Euro (EUR) struggled to find a clear directional bias yesterday amid a lack of Eurozone economic data.
EUR was able to rise against some of its riskier peers as the market mood soured. However, the Euro’s negative correlation with a recovering US Dollar (USD) pressured the common currency in the afternoon.
This morning, Germany’s harmonised inflation rate unexpectedly eased. This could dampen European Central Bank (ECB) interest rate rise bets, thereby denting the Euro today.
US Dollar (USD) Recovers following Hawkish Fed Comments
A risk-on mood initially dampened the safe-haven US Dollar’s appeal yesterday, causing it to slip against many of its peers.
However, hawkish comments from two Federal Reserve officials in the afternoon help the ‘Greenback’ recover. Both policymakers suggested that more rate rises are on the way and that the Fed may hold rates higher for longer.
Turning to today, the latest initial jobless claims figure could impact USD. If claims remain low, signs of a tight labour market could further boost Fed rate hike bets.
Canadian Dollar (CAD) Slips despite Oil Uptick
The Canadian Dollar (CAD) softened yesterday, with a rise in oil prices failing to lift the crude-linked ‘Loonie’.
Economic data out of Canada is lacking today. Therefore, oil price dynamics could impact CAD exchange rates.
Australian Dollar (AUD) Recovers as Risk Appetite Returns
The Australian Dollar (AUD) strengthened overnight, recouping yesterday’s losses, as an upbeat market mood boosted the risk-sensitive currency.
New Zealand Dollar (NZD) Climbs amid Upbeat Market Mood
Likewise, the risky New Zealand Dollar (NZD) firmed during last night’s bullish trade.