US Dollar (USD) Pressured amid Risk-On Mood
The US Dollar (USD) struggled yesterday, as an improving appetite for risk dampened demand for the safe-haven ‘Greenback’.
Amid hopes that that Federal Reserve would achieve a ‘soft landing’ and positive economic news out of China, upbeat investors opted for riskier assets.
The market mood could continue to drive USD exchange rates today amid a lack of data. Will an ongoing improvement in sentiment see the ‘Greenback’ move lower?
Pound (GBP) Unable to Sustain Upside
The Pound (GBP) initially found some success against its safer peers yesterday, as an upbeat mood boosted the increasingly risk-sensitive currency.
However, Sterling struggled to sustain its upward momentum through the latter part of the session amid a lack of UK data.
This morning, the Pound is facing a mixed labour market report. Record-high wage growth is boosting Bank of England (BoE) interest rate rise bets, although an uptick in unemployment is offsetting the upside.
Euro (EUR) Cushioned by USD Correlation
The Euro (EUR) faced headwinds early on in yesterday’s session. The European Commission downgraded the Eurozone’s GDP forecast, raising recession fears.
The single currency was propped up, however, by its strong negative correlation with a weakening US Dollar. This cushioned EUR and helped it regain ground through the afternoon.
Looking forward, Germany’s latest ZEW economic sentiment index is in focus. If it drops to a nine-month low, as expected, the Euro could slide.
Canadian Dollar (CAD) Wavers Higher as Oil Prices Rise
The Canadian Dollar (CAD) fluctuated higher yesterday, with the commodity-linked ‘Loonie’ trading in tandem with oil prices.
With Canadian data thin on the ground today, crude prices could continue to drive CAD exchange rates.
Australian Dollar (AUD) Wavers on Mixed Data
The Australian Dollar (AUD) fluctuated last night following mixed data. While consumer confidence unexpectedly declined, business confidence surprised to the upside.
New Zealand Dollar (NZD) Wobbles Lower amid Cautious Mood
The New Zealand Dollar (NZD) wavered lower overnight as a muted market mood saw the ‘Kiwi’ struggle to find support.