US Dollar (USD) Soars amid Risk-Negative Trade and Fed Bets
Risk aversion worked in the safe-haven US Dollar’s (USD) favour on Friday, with the ‘Greenback’ posting gains from the open of the day’s session.
An unexpected rise in the core PCE price index, printed in the afternoon, saw USD strengthen further. The price index is the Federal Reserve’s preferred measure of inflation, so the hot reading increased market bets on more interest rate rises.
Looking ahead, could an expected slump in US durable goods orders trim USD’s gains this afternoon?
Pound (GBP) Mixed amid Lack of Data
The Pound (GBP) struggled for a clear direction on Friday amid a lack of UK economic data.
A risk-off market mood saw Sterling slip against its safer peers and rise against its riskier ones.
Turning to today, data remains scarce. GBP investors may therefore take their cues from domestic headlines. Will signs the UK and EU are close to a Northern Ireland Protocol deal boost the Pound?
Euro (EUR) Firms despite German GDP Miss
The Euro (EUR) found some success at the end of last week’s trade, despite initially stumbling. Germany’s final GDP reading for Q4 2022 showed a larger-than-forecast contraction of 0.4%, which weighed on the single currency.
However, hawkish comments from European Central Bank (ECB) policymaker Joachim Nagel helped lift EUR, with the Euro gaining against many of its weaker counterparts.
Later this morning, the Eurozone’s economic sentiment indicator is expected to improve for the fourth consecutive month. The Euro could strengthen if the data prints as forecast.
Canadian Dollar (CAD) Subdued amid Falling Oil Prices
The Canadian Dollar (CAD) struggled on Friday as a slump in oil prices dragged on the crude-linked ‘Loonie’. However, CAD’s positive correlation with USD limited steeper losses.
Movements in the oil market could continue to impact the Canadian Dollar today, as notable economic data is thin on the ground.
Australian Dollar (AUD) Sinks in Cautious Trade
The Australian Dollar (AUD) opens this week on the back foot. A bearish market mood leading the risk-sensitive ‘Aussie’ to given ground during Monday’s Asian trading session.
New Zealand Dollar (NZD) Dented by Risk-Off Flows
The New Zealand Dollar (NZD) is also negatively impacted by a risk-off impulse this morning as investors favour safe-haven assets.