Euro (EUR) Rallies amid Hawkish ECB Rhetoric
The Euro (EUR) strengthened during Tuesday’s trade, as the European Central Bank’s (ECB) Sintra Forum kicked off with hawkish speeches from ECB policymakers.
Most notable was a speech from the bank’s President Christine Lagarde, who indicated that more monetary tightening was on the way and pushed back against rate cut expectations.
Lagarde is due to speak again today as part of a panel of central bank chiefs at the ECB Forum. More hawkish hints could provide the Euro with further support.
Pound (GBP) Directionless amid Economic Concerns
Mixed movement hit the Pound (GBP) yesterday, with the increasingly risk-sensitive currency finding some success amid an improving market mood.
Sterling found its upside potential severely capped by growing concerns about the UK economy as rising interest rates could push the country into a recession.
Later today, Bank of England (BoE) Governor Andrew Bailey will be taking part in a panel event alongside other central bank chiefs. Will he be able to soothe GBP investors’ fears?
US Dollar (USD) Slips as Chinese Banks Sell USD Reserves
The US Dollar (USD) came under pressure yesterday as Chinese state banks started selling USD reserves to shore up the Yuan (CNY).
Upbeat US data helped to limit USD’s losses, with durable goods orders unexpectedly expanding and consumer confidence beating forecasts.
Federal Reserve Chair Jerome Powell will join the BoE and ECB chiefs at today’s panel event. Will a cautious tone from the head of the Fed see the US Dollar come under pressure?
Canadian Dollar (CAD) Slides as Inflation Cooldown Dents BoC Bets
The Canadian Dollar (CAD) took a hit yesterday, as a cooldown in Canadian inflation dampened bets on more rate hikes from the Bank of Canada (BoC).
The ‘Loonie’ may face lingering headwinds today as traders reprice BoC expectations. Oil prices could also affect the commodity-linked currency. Will weaker prices drag CAD lower?
Australian Dollar (AUD) Tumbles as Inflation Cools
The Australian Dollar (AUD) slumped overnight after Australia’s CPI reported a larger-than-forecast cooldown in inflation last month, thereby denting Reserve Bank of Australia (RBA) bets.
New Zealand Dollar (NZD) Drops amid Chinese Economy Concerns
The New Zealand Dollar (NZD) also fell sharply overnight following a large contraction in Chinese industrial profits. Due to the tight trading relationship between New Zealand and China, this news weighed heavily on the ‘Kiwi’.