US Dollar Regains Ground as Sentiment Sours

US Dollar (USD) Rises as Risk Aversion Grips Markets

After a sluggish start on Friday, the US Dollar (USD) eventually climbed higher. Traders took to the safe-haven ‘Greenback’ as a risk-off mood began to sweep markets.

Downbeat US data in the afternoon only seemed to dampen the market mood further, thereby supporting USD exchange rates.

Turning to today, a handful of Federal Reserve rate setters are due to speak through the afternoon. Any signals of a coming pause in the Fed’s rate hiking cycle could dent the ‘Greenback’.

Pound (GBP) Unclear following UK GDP

The Pound (GBP) failed to find a clear direction on Friday following mixed UK GDP data.

The UK economy grew by 0.1% in the first quarter of this year, raising hopes that the country will avoid a recession. However, GDP suffered a surprise contraction of 0.3% in March, which offset the optimism.

Looking to this week’s session, today may bring muted movement as investors await tomorrow’s jobs report. Could signs of ongoing wage growth and a tight labour market push Sterling higher tomorrow?

Euro (EUR) Weakens in Absence of Data

The Euro (EUR) softened against many of its peers at the end of last week, as a lack of Eurozone data left the common currency without support.

Lingering headwinds following the European Central Bank’s (ECB) interest rate decision and recent downbeat data seemed to pressure EUR, as did the currency’s negative correlation with a stronger US Dollar.

The Euro could face more headwinds this morning as forecasters expect to see a slump in Eurozone industrial production.

Canadian Dollar (CAD) Capped by Softer Oil Prices

The Canadian Dollar (CAD) found modest success on Friday thanks to the currency’s positive trading relationship with the US Dollar. However, another decline in oil prices severely limited the crude-linked currency’s upside.

Oil prices have continued to decline this week. Could this see CAD fall lower during today’s trade?

Australian Dollar (AUD) Firms amid Cheery Mood

The Australian Dollar (AUD) marched higher last night as an upbeat market mood boosted the risk-sensitive currency.

New Zealand Dollar (NZD) Rises amid Risk-On Trade

The New Zealand Dollar (NZD) also firmed overnight as risk appetite recovered. However, a downbeat services PMI limited NZD’s gains.

Samuel Birnie

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