US Dollar (USD) Stumbles amid Cheery Mood
The safe-haven US Dollar (USD) faced some selling pressure early on in yesterday’s session, as a bullish tone in markets sapped the currency’s appeal.
However, USD managed to recoup some losses later in the session. New unemployment claims remained historically low, pointing to a tight labour market and thereby boosting Federal Reserve rate rise bets.
Looking ahead, hawkish Fed speeches this evening could help the US Dollar gain ground. Before then, an anticipated rise in US consumer sentiment could also help the ‘Greenback’.
Pound (GBP) Rises amid Positive Trade
An upbeat market mood lifted the risk-sensitive Pound (GBP) yesterday, while apparent optimism ahead of today’s UK GDP rate also aided Sterling.
GBP even shook off mixed messages from the Bank of England (BoE), after policymakers expressed differing views as they testified in front of the Treasury Committee.
This morning, the UK’s latest GDP reading revealed that the UK economy stalled in the fourth quarter, meaning the country avoided a recession last year. This apparent resilience may lift GBP today, although many economists say the UK could still contract this year.
Euro (EUR) Slips after German Inflation Miss
The Euro (EUR) initially fell at the start of Thursday’s trade as an unexpected decline in Germany’s harmonised inflation rate dampened expectations for interest rate rises from the European Central Bank (ECB).
The common currency’s downside was cushioned, however, thanks to its negative correlation with a weakening US Dollar.
Through today’s session, USD movement and Russia-Ukraine news could affect EUR exchange rates. In the evening, a speech from the ECB’s Isabel Schnabel could impact the Euro. Will hawkish comments buoy the single currency?
Falling Oil Drags the Canadian Dollar (CAD) Down
A slump in oil prices dragged the commodity-linked Canadian Dollar (CAD) lower yesterday. WTI crude fell from a high of $78.84 a barrel down to a daily low of around $76.50, taking CAD with it.
Today, Canada’s latest employment data is the focus. An expected uptick in the jobless rate could weigh on the ‘Loonie’.
Australian Dollar (AUD) Wavers as Market Mood Shifts
The risk-sensitive Australian Dollar (AUD) fluctuated overnight as a shifting market mood saw AUD dip and then recover. A hawkish policy statement from the Reserve Bank of Australia (RBA) prompted very little reaction among investors.
New Zealand Dollar (NZD) See-Saws amid Changing Risk Appetite
Likewise, the New Zealand Dollar (NZD) wobbled overnight amid the turnaround in risk sentiment.