Euro (EUR) Supported by Uptick in German Consumer Confidence
The Euro (EUR) firmed against many of its peers yesterday as an increase in German consumer confidence brought modest cheer to EUR investors.
However, the index remained in pessimistic territory, which may have capped potential gains. Furthermore, a recovery in the US Dollar (USD) in the afternoon trimmed the Euro, due to EUR’s negative correlation with USD.
This afternoon, the latest German CPI data is due to print. A fall is expected, which could weigh on EUR by dampening expectations of more policy tightening from the European Central Bank (ECB).
Pound (GBP) Narrows as Data Calendar Remains Sparse
The Pound (GBP) saw minimal movement yesterday as a dearth of data releases continued to provide little direction.
Concerns over the UK’s economic outlook after the recent turmoil in financial markets may have weighed on Sterling. The risk of a ‘credit crunch’ may have contributed to GBP investors taking a bearish approach to yesterday’s session, despite an upbeat mood in global markets.
Today, the lack of data continues. This could keep GBP vulnerable to external factors, but if the market mood remains upbeat Sterling could strengthen.
US Dollar (USD) Wavers as Investors Adjust Rate Hike Bets
The US Dollar remained in flux yesterday as investors readjusted their expectations for further policy tightening from the Federal Reserve.
An initially upbeat market mood also pressured the safe-haven currency. A recovery in US Treasury yields allowed USD to regain some ground through the second half of the session.
Initial jobless claims for the week ending 25 March are due this afternoon. If they show a tight labour market, the US Dollar could rally.
Canadian Dollar (CAD) Ticks Upward as Oil Prices Climb
The Canadian Dollar (CAD) firmed yesterday as oil prices continued to climb, partially due to a pipeline closure in Iraqi Kurdistan.
A decline in earnings growth could dent the ‘Loonie’ today. However, the downside could be offset if oil prices continue to climb.
Australian Dollar (AUD) Rallies in Risk-On Trade
The Australian Dollar (AUD) surged higher last night as a positive tone in markets boosted the risk-sensitive ‘Aussie’.
New Zealand Dollar (NZD) Climbs as Sentiment Improves
Likewise, the risky New Zealand Dollar (NZD) posted strong overnight gains thanks to the upbeat market mood.