Pound (GBP) Firms amid Positive Investor Mood
Renewed optimism in European markets lifted the Pound (GBP) yesterday, with many firms in the banking sector recouping losses following Friday’s selloff.
In addition, positive UK retail sales data boosted GBP. The Confederation of British Industry’s (CBI) distributive trades survey reported ‘encouraging’ signs of ‘resilience’ and ‘optimism’ among UK retail firms.
This morning, Bank of England (BoE) Governor Andrew Bailey is due to deliver a speech. If the bank chief once again signals that there is a possibility of future interest rate rises, Sterling could strengthen.
Euro (EUR) Enjoys Upbeat German Data
The Euro (EUR) ticked higher yesterday as signs of stability in the European banking sector and upbeat German data lifted EUR exchange rates.
However, a flare-up of Russia-Ukraine tensions capped the single currency’s upside. Nuclear sabre-rattling from Russian President Vladimir Putin spooked EUR investors, keeping a lid on the Euro’s gains.
A lack of Eurozone economic data today could leave the common currency to trade without a clear direction. Any new developments among European banks could prompt movement.
US Dollar (USD) Softens amid Rising Risk Appetite
The US Dollar (USD) struggled yesterday as a risk-positive tone among investors sapped the safe-haven currency’s appeal.
The ‘Greenback’ found its downside cushioned thanks to a rally in US Treasury yields. With financial markets stabilising, it opens up more room for the Federal Reserve to raise interest rates again.
Looking ahead, a forecast slip in US consumer confidence could dent USD this afternoon. Remarks from Fed official Michael S. Barr could also impact the ‘Greenback’. Will hawkish comments lift the currency?
Rising Oil Prices Lift the Canadian Dollar (CAD)
Rallying oil prices buoyed the crude-linked Canadian Dollar (CAD) yesterday, although it wasn’t able to gain ground against its stronger peers.
Canadian economic data remains thin on the ground today, so movements in the commodities markets could continue to drive CAD exchange rates. Will an ongoing recovery in oil see the ‘Loonie’ rise further?
Australian Dollar (AUD) Climbs amid Risk-Positive Trade
The Australian Dollar (AUD) shrugged off weak retail data and leapt higher last night as an upbeat market mood boosted the risk-sensitive currency.
New Zealand Dollar (NZD) Strengthens as Sentiment Improves
Likewise, the risky New Zealand Dollar (NZD) rallied overnight thanks to the cheery sentiment among investors.