US Dollar (USD) Rises as Recession Anxieties Yield Risk-Off Trade
Tuesday saw a bleak market mood bring safe-haven flows to the US Dollar (USD), lifting it against most peers.
Downbeat economic data, such as a fall in JOLTs job openings for June, weighed on risk appetite. With US recession anxieties elevated, bearish trade ruled the day.
This afternoon, the latest ADP employment data could weaken USD, as economists forecast a sharp drop in employment growth last month.
Pound (GBP) Listless as Economic Jitters Flare
The Pound (GBP) traded lethargically yesterday, as growing economic anxieties outweighed Bank of England (BoE) interest rate expectations.
The final manufacturing index printed and confirmed the sharpest slowdown in activity since July 2020. This brought about renewed concerns over the UK’s economic outlook.
Owing to a light data calendar, GBP investors may shift their focus to the BoE’s imminent rate hike, potentially leaving Sterling rangebound today.
Euro (EUR) Undermined by Easing ECB Bets
Although German unemployment levels surprisingly fell, the Euro (EUR) only managed to post small gains yesterday.
The unemployment rate for the Eurozone’s largest economy fell to 5.6%, with 40,000 fewer workers unemployed than in June. But this was not enough to convince EUR investors the European Central Bank (ECB) will continue to raise interest rates.
With data releases in short supply, the Euro may struggle to attract support over the course of today’s session.
Canadian Dollar (CAD) Limited by Oil Price Volatility
Initially the Canadian Dollar (CAD) firmed on Tuesday following a better-than-expected manufacturing index, although falling oil prices tempered these gains.
Oil price dynamics are likely to be the main driver of movement for the ‘Loonie’ today. Could a rebound in prices boost CAD?
Australian Dollar (AUD) Bogged Down by Risk Averse Trade
Overnight, The Australian Dollar (AUD) continued to struggle as the market mood remained downbeat.
New Zealand Dollar (NZD) Slides amid Increasing Unemployment
The New Zealand Dollar (NZD) fell sharply overnight on Tuesday, following a shock uptick in domestic unemployment in the second quarter