Pound (GBP) Surges despite Lack of Data
Despite a lack of UK economic data, the Pound (GBP) marched higher through yesterday’s session.
The upside came as markets continued to bet on at least one more interest rate hike from the Bank of England (BoE) amid recent optimism surrounding the British economy.
This morning, the UK’s final services PMI could affect Sterling if it differs from preliminary estimates. If it’s revised downwards, as the manufacturing PMI was on Monday, the Pound could stumble.
Euro (EUR) Recovers amid USD Selloff
The Euro (EUR) initially saw mixed movement yesterday. Encouraging German trade figures bolstered EUR, while declining consumer inflation expectations offset the upside by dampening European Central Bank (ECB) rate rise bets.
The common currency enjoyed tailwinds in the afternoon, however, courtesy of its negative trading relationship with the US Dollar (USD), as the latter faced heavy selling pressure.
A huge surge in German factory orders published earlier this morning has given EUR a lift today. The Eurozone’s final services PMI has also been published, confirming a strong expansion but coming in slightly below forecasts. These data releases could provide EUR tailwinds through today’s session.
US Dollar (USD) Slides following Downbeat Data
From the open of yesterday’s European session, the US Dollar began to weaken. An upbeat market mood put pressure on the safe-haven currency.
USD attempted to regain ground as the day went on, but its best efforts were scuppered. Weaker-than-forecast job openings and factory orders put notable pressure on the ‘Greenback’.
Later today, economists expect the ISM non-manufacturing PMI to reveal a slowdown in US service-sector activity. Such a result could trigger another downside in USD.
Canadian Dollar (CAD) Falls as Oil Prices Decline
The commodity-tied Canadian Dollar (CAD) retreated yesterday as a drop in oil prices and a weaker US Dollar both dragged the ‘Loonie’ lower.
Unless it surprises markets, Canada’s trade balance data today may not cause much movement. As a result, CAD could continue to trade on oil and USD dynamics.
Australian Dollar (AUD) Weakens despite Hawkish RBA Rhetoric
The Australian Dollar (AUD) initially ticked higher during last night’s trade, although it then fell through the latter part of the overnight session. The downward movement came despite Reserve Bank of Australia (RBA) Governor Philip Lowe trying to strike a hawkish tone.
New Zealand Dollar (NZD) Jumps as RBNZ Hikes Rates
The New Zealand Dollar (NZD) soared last night after the Reserve Bank of New Zealand (RBNZ) surprised markets with a half-point rate rise. Economists had expected the bank to hike by 25bps, but it lifted its official cash rate by 50bps and signalled more increases to come.