Euro (EUR) Nosedives Following Credit Suisse Selloff
The Euro (EUR) plunged during yesterday’s session as the Credit Suisse selloff reverberated through markets.
Fears of financial instability in Europe put particular pressure on the Euro ahead of the European Central Bank (ECB) today.
While most analysts expect the bank to press ahead with a planned 50bps interest rate rise, rattled policymakers may advocate caution in the months ahead. Dovish forward guidance from the ECB could further hurt the common currency.
Pound (GBP) Mixed Following UK Budget
The Pound (GBP) traded in a wide range yesterday following mixed forecasts from the Office for Budget Responsibility (OBR), which accompanied the Chancellor’s Spring Budget. The OBR said that, although the UK may avoid a technical recession, living standards still face a record fall.
Adding to Sterling’s mixed movement was fear of a European banking sector collapse created turmoil in the currency markets.
UK data is thin on the ground today. As a result, any movement in the Pound may be tied to market sentiment, with a downbeat mood potentially dragging on Sterling sentiment.
US Dollar (USD) Firms in Skittish Trade
The US Dollar (USD) rallied on Wednesday as concerns over the banking sector turmoil saw skittish investors flock to the safe-haven currency.
However the ‘Greenback’s gains were tempered as the chaos in the financial sector saw USD investors lower their expectations for a Federal Reserve interest rate hike next week.
The US Dollar looks poised to extend its gains today, assuming the banking sector crisis continues to dominate headlines.
Canadian Dollar (CAD) Dented by Oil Price Rout
The Canadian Dollar (CAD) weakened on Wednesday. A plunge in oil prices undermined the appeal of the commodity-linked currency.
In the absence of any notable domestic data, CAD exchange rates may remain tied to oil price dynamics.
Australian Dollar (AUD) Rallies on Upbeat Employment Figures
The Australian Dollar (AUD) firmed overnight. Recouping some of Wednesday’s losses after Australia’s latest jobs data reported a surprise fall in domestic unemployment last month.
New Zealand Dollar (NZD) Undermined by Disappointing GDP Figures
The New Zealand Dollar (NZD) fell overnight on Wednesday as NZD investors were rattled by a larger-than-expected contraction in fourth quarter GDP.