Pound (GBP) Soars following January GDP Rebound
At the end of a dramatic week, the Pound (GBP) extended its recovery thanks to better-than-expected UK GDP data.
The British economy expanded by 0.3% in January, versus the forecast reading of 0.1%. This raised hopes that the UK may avoid a recession this year, while also boosting Bank of England (BoE) interest rate rise bets.
Sterling may be muted amid a lack of data today. Tomorrow, however, the latest labour market report is due out. Could easing wage growth and rising unemployment see the Pound falter?
Euro (EUR) Rallies amid USD Weakness
Friday morning was rather lacklustre for the Euro (EUR), with the single currency travelling sideways after uneventful German inflation data.
However, EUR strengthened in the afternoon, thanks to the currency’s negative correlation with the weakening US Dollar (USD).
Eurozone data is thin on the ground through the first part of the week. As a result, Russia-Ukraine news could impact EUR exchange rates.
US Dollar (USD) Slides on Mixed Jobs Data
The US Dollar fell sharply on Friday after US jobs data disappointed investors. Although the non-farms payrolls report exceeded expectations, a rise in the unemployment rate and cooling monthly wage growth dented Federal Reserve rate hike bets.
The safe-haven ‘Greenback’ tried to recoup losses against its weaker peers later on. The collapse of Silicon Valley Bank rattled markets, making the safer USD an attractive investment. However, it also dented the likelihood of more aggressive rate rises from the Fed.
An expected uptick in US consumer inflation expectations could lift the US Dollar today. However, USD investors may be hesitant to place any aggressive bets ahead of tomorrow’s US inflation data. In the meantime, the pullback in Fed tightening expectations could apply some pressure to the ‘Greenback’.
Canadian Dollar (CAD) Stumbles as Oil Drops
The Canadian Dollar (CAD) declined at the end of last week. The crude-linked ‘Loonie’ suffered from a drop in oil prices and the currency’s positive correlation with USD.
In the absence of any CAD data today, oil price dynamics may influence the ‘Loonie’.
Australian Dollar (AUD) Rallies amid Risk-On Trade
The Australian Dollar (AUD) strengthened overnight as an upbeat mood boosted the risk-sensitive currency.
New Zealand Dollar (NZD) Rises as Market Mood Improves
The New Zealand Dollar (NZD) also climbed last night as the riskier ‘Kiwi’ enjoyed an improving market sentiment.