Pound (GBP) Directionless in Absence of Data
The Pound (GBP) lacked direction during yesterday’s trade, as a lack of economic releases left Sterling vulnerable to external influences.
Soaring food inflation may have undermined sentiment towards Sterling. Now hitting 17.5%, an 18-year high, the elevated levels brought the impact of inflation on UK households into focus.
This evening, Bank of England (BoE) policymaker Catherine Mann is due to speak. If she retains her usual hawkish stance, GBP could rally.
Euro (EUR) Underpinned by Hawkish ECB Rhetoric
The Euro (EUR) traded in narrow boundaries against most peers yesterday. Hawkish remarks from European Central Bank (ECB) policymakers served to keep the common currency afloat.
However, the upbeat market mood prevented the safe Euro from making significant gains. Despite a weakening US Dollar and increased rate hike bets, investors favoured riskier assets.
Earlier this morning, the German GfK consumer confidence index for April printed at -29.5. The below-forecast print is doing little to inspire EUR so far, but could lend some support as we move through the European session.
US Dollar (USD) Weakens as Risk Appetite Returns
The US Dollar (USD) struggled for support on Tuesday, as elevated risk appetite prevented the safe-haven currency from gaining traction.
Due to the Federal Reserve taking a less hawkish path, global market jitters have eased. This upbeat trade appeared to prevent the ‘Greenback’ from capitalising on an uptick in US consumer confidence.
With data releases relatively lacking today, USD could trade on market sentiment. If risk appetite remains strong, the ‘Greenback’ could weaken.
Canadian Dollar (CAD) Falls amid Profit-Taking
The Canadian Dollar (CAD) weakened yesterday, as investors enacted profit-taking following an early-week surge in CAD.
This evening, the Bank of Canada’s (BoC) Deputy Governor Toni Gravelle is due to speak. He could dent the ‘Loonie’ by reiterating the BoC’s dovish outlook.
Australian Dollar (AUD) Slips on Cooler-than-Expected CPI
The Australian Dollar (AUD) weakened in overnight trade, following a larger-than-forecast cooldown in February’s inflation rate reading. This reinforced expectations that the Reserve Bank of Australia (RBA) may pause its policy tightening cycle.
New Zealand Dollar (NZD) Wavers amid Shifting Market Mood
The risk-sensitive New Zealand Dollar (NZD) fluctuated overnight, as the market mood ebbed and flowed.