US Dollar (USD) Firms as Market Mood Sours
The US Dollar (USD) gained ground yesterday as a worsening market mood saw investors favour the safe-haven ‘Greenback’.
Concerns over a slowdown in global economic growth weighed on investor risk appetite.
Looking ahead, Federal Reserve Chair Jerome Powell is due to testify in front of the US Senate this afternoon. Could hints of further rate hikes see USD gain more ground?
Pound (GBP) Slips amid Risk-Off Trade
The Pound (GBP) stumbled against many of its peers yesterday, as a gloomy market mood put pressure on the increasingly risk-sensitive UK currency.
Sterling was spared steeper losses thanks to speculation around the Bank of England (BoE) interest rate decision, with markets anticipating a hawkish announcement.
Today, Sterling could march higher, as UK inflation exceeded forecasts this morning. Core inflation unexpectedly hit a fresh 31-year high, ratcheting up pressure on the BoE to keep aggressively raising rates.
Euro (EUR) Capped by Signs of Easing Inflation
The Euro (EUR) found some success yesterday, moving higher against its riskier peers thanks to a souring risk sentiment.
A contraction in German PPI capped EUR’s upside potential. The data indicates easing inflation, which takes pressure off the European Central Bank (ECB) to continue raising interest rates.
Turning to today’s session, a speech from ECB policymaker Isabel Schnabel could support the single currency if she strikes a hawkish tone. Otherwise, risk appetite could impact EUR once again.
Canadian Dollar (CAD) Limited by Weaker Oil Prices
The Canadian Dollar (CAD) managed to move higher against some of its weaker rivals yesterday, thanks to CAD’s positive trading relationship with USD. However, falling oil prices put a lid on the crude-linked ‘Loonie’.
This afternoon, the Canadian Dollar could see more positive movement. Economists expect to see Canadian retail sales return to growth, while the Bank of Canada’s (BoC) meeting minutes following its shock rate hike could add to the upside.
Australian Dollar (AUD) Slips amid Cautious Trade
The Australian Dollar (AUD) weakened during overnight trade as a bearish mood weighed on the risk-sensitive currency.
New Zealand Dollar (NZD) Wobbles amid Lack of Data
An absence of data saw the New Zealand Dollar (NZD) waver last night, resisting losses despite the risk-negative tone without a clear catalyst for the movement.