US Dollar (USD) Firms amid Risk-Off Trade
The US Dollar (USD) rallied yesterday as widespread risk aversion saw traders flock to the safe-haven ‘Greenback’.
Fears around the future of US regional bank First Republic rattled investors, with the bank’s shares plunging 20%. The selloff spread into European markets, and the anxious market mood supported USD exchange rates.
This nervousness has continued this morning, which may provide some support to USD through the first part of the session. Later today, a forecast recovery in US durable goods orders could boost the ‘Greenback’.
Pound (GBP) Softens amid Evidence of Easing Inflation
The Pound (GBP) weakened yesterday as evidence of easing inflationary pressures dampened Bank of England (BoE) rate rise bets. The latest surveys from the Confederation of British Industry (CBI) showed that cost pressures receded for manufacturers.
Meanwhile, BoE policymaker Ben Broadbent also said that inflation seems to be easing. His comments built on those of former BoE Chief Economist Andy Haldane, who said on Sunday that UK inflation will soon fall rapidly.
The CBI’s distributive trades survey later this morning could see Sterling fall further. Economists expect UK sales volumes to have stalled this month.
Euro (EUR) Muted in Absence of Data
The Euro (EUR) was subdued yesterday as a lack of economic data from the Eurozone left EUR struggling to find a clear direction.
A downbeat market mood helped the safer single currency rise against its riskier peers. However, EUR suffered from its negative correlation to a strengthening US Dollar.
This morning, the Euro is trending higher after German consumer confidence beat forecasts. Household morale in the Eurozone’s largest economy rose for the seventh consecutive month, hitting a 13-month high.
Canadian Dollar (CAD) Dragged Down by Weaker Oil Prices
The Canadian Dollar (CAD) declined yesterday as a drop in oil prices weighed on the crude-linked currency.
This evening, the Bank of Canada’s (BoC) latest meeting minutes are due out. If they confirm the central bank’s dovish stance, CAD could stumble.
Australian Dollar (AUD) Falls amid Easing Inflation
The Australian Dollar (AUD) fell last night after the latest Australian consumer price index confirmed a slowdown in inflation, dampening Reserve Bank of Australia (RBA) bets.
New Zealand Dollar (NZD) Dips alongside AUD
The New Zealand Dollar (NZD) also weakened overnight as the ‘Kiwi’ was dragged lower by its positive correlation to the Australian Dollar.