US Dollar (USD) Trims Gains but Holds Strong
The US Dollar (USD) softened yesterday, despite stronger-than-forecast US employment data, as the ‘Greenback’ fell victim to some profit-taking.
Nevertheless, USD exchange rates held near multi-month highs as markets continued to bet on a 50bps hike from the Federal Reserve in two weeks’ time.
Looking ahead, initial jobless claims are expected to remain low, evidencing a tight labour market and potentially boosting rate rise bets. This could give the US Dollar a lift later in the session.
Pound (GBP) Muted as Lack of Data Continues
The Pound (GBP) was subdued during yesterday’s session amid the ongoing scarcity of British economic data.
While a slight return of risk appetite saw Sterling edge up against its safer peers, dovish comments from Bank of England (BoE) policymaker Swati Dhingra put pressure on the Pound.
The lack of market-moving data continues today, meaning GBP may be at the mercy of external factors once again.
Euro (EUR) Fluctuates following Mixed Data
The Euro (EUR) faced some choppy trade yesterday, rising and falling after upbeat German data and a downward revision to Eurozone GDP growth in the fourth quarter of 2022.
However, EUR managed to firm up during the afternoon. A pullback in the US Dollar may have aided the Euro, due to the common currency’s negative correlation to the ‘Greenback’.
Amid an absence of Eurozone data today, USD movement could continue to impact EUR. Russia-Ukraine news could also affect the single currency.
Canadian Dollar (CAD) Slips following Dovish BoC Decision
The Canadian Dollar (CAD) dropped yesterday after the Bank of Canada (BoC) left interest rates unchanged at its policy meeting.
Later this evening, BoC Senior Deputy Governor Carolyn Rogers is due to speak. Could dovish rhetoric put further pressure on CAD exchange rates?
Australian Dollar (AUD) Lifted by Rising Commodities
The Australian Dollar (AUD) found modest success overnight, with an uptick in some commodity prices lifting the resource-linked ‘Aussie’. However, the upside was severely limited amid a risk-off mood.
New Zealand Dollar (NZD) Edges Up as Data Beats Forecasts
The New Zealand Dollar (NZD) also ticked higher last night, with better-than-expected retail card spending data lending the ‘Kiwi’ modest support.