Pound (GBP) Supported by Upbeat Market Mood
The Pound (GBP) strengthened on Monday, as a bullish market mood countered downbeat domestic headlines.
The BDO, an accountancy and business advisory group, reported that business optimism had stagnated. Because of this, Sterling began Monday on the back foot, but its increasingly risk-sensitive nature brought support later in the day.
This morning, December’s unemployment and wage growth data was published. A stronger-than-expected wage growth print offers some initial gains for GBP, but it remains to be seen if these gains can be consolidated.
Euro (EUR) Supported by Recession Miss Predictions
The Euro (EUR) was buoyed on Monday, as the European Commission published their somewhat optimistic winter forecast.
The EC stated that they believed the Eurozone would sidestep a recession during 2023. However, Russia reported that they had gained ground in Ukrainian territory, which may have capped EUR’s gains.
With data thin on the ground, the Euro is likely to trade on market sentiment. Any details on further conflict between Ukraine and Russia may weigh on the common currency.
US Dollar (USD) Weighed Down amid Bullish Trade
The US Dollar (USD) weakened on Monday, as the safe-haven currency was unable to gain ground amid an optimistic session.
However, increasing geopolitical tensions may have cushioned USD somewhat. With the US downing multiple objects over the weekend amidst increasing tensions with China, anxieties remain high.
January’s US consumer price index is due to print later today. With a fall in inflation forecast, USD may weaken as the Federal Reserve’s tightening cycle could see more reasons to slow.
Canadian Dollar (CAD) Weakens amid Falling Oil Prices
The Canadian Dollar (CAD) was undermined on Monday, as falling oil prices weighed on the commodity-linked ‘Loonie’.
Due to a lack of data, CAD may trade on its relationship with the US Dollar today. If US inflation prints as forecast, the ‘Loonie’ could weaken alongside USD.
Australian Dollar (AUD) Wavers amid Downbeat Consumer Sentiment
The Australian Dollar (AUD) wavered overnight, as the Westpac consumer sentiment index showed a sharp drop for February.
New Zealand Dollar (NZD) Slumps amid Falling Inflation Expectations
The New Zealand Dollar (NZD) also dropped overnight as domestic business expectations for inflation fell below investor predictions.