Pound (GBP) Rallies on UK-EU Reconciliation
The Pound (GBP) rallied yesterday as the optimism around PM Rishi Sunak’s ‘Windsor Framework’ continued.
As investors and analysts explored the detail of the new deal, hopes for a stronger UK-EU trade relationship boosted Sterling sentiment.
Bank of England (BoE) Governor Andrew Bailey is due to speak this morning. Would a hawkish speech further boost GBP?
Euro (EUR) Underpinned by ECB Rate Hike Bets
The Euro (EUR) endured mixed trade yesterday, but was underpinned by European Central Bank (ECB) hike bets.
With French and Spanish inflation both increasing, the pressure on the ECB to pursue further tightening is mounting. However, a mixed market mood likely prevented the single currency from capitalising on these gains.
This afternoon, the latest CPI data for Germany is due to release. Inflation in the Eurozone’s largest economy is forecast to have fallen slightly over February, which could weigh on EUR.
US Dollar (USD) Struggles amid Consumer Confidence Dip
The US Dollar (USD) struggled for support yesterday, following the release of February’s consumer confidence index.
Printing at 102.9, the index came in far below the expected print of 108.5, reflecting a drop in confidence from US households. Furthermore, inflation expectations fell to 6.3%, releasing some of the pressure on the Federal Reserve.
This afternoon, the ISM manufacturing PMI is due to release. The index is forecast to stay in contractionary territory, which could dent the ‘Greenback’.
Canadian Dollar (CAD) Crumbles amid Stagnating Economy
The Canadian Dollar (CAD) weakened yesterday, after the latest GDP data reported a stalling of growth in the fourth quarter. These anxieties over a stagnant economy were enough to counteract rises in oil prices.
The manufacturing index for February is due today. If it shows a stall as forecast, the ‘Loonie’ could weaken further.
Australian Dollar (AUD) Rallied amid Hotter-Than-Expected Chinese PMIs
The Australian Dollar (AUD) strengthened overnight, as the Chinese proxy-currency benefitted from forecast-beating Chinese private sector indexes.
New Zealand Dollar (NZD) Strengthens on Bullish Trade
The risk-sensitive New Zealand Dollar (NZD) was boosted overnight by an upbeat market mood. New Zealand’s close economic ties to China lent further support, amid above-forecast Chinese PMIs.