US Dollar (USD) Recovers as Risk Appetite Fades
The US Dollar (USD) faced selling pressure at the end of last week, with a risk-on mood and a slowdown in US inflation both weighing on the safe-haven ‘Greenback’.
However, USD rebounded strongly through the second half of the session. With the market mood souring and investors looking to reposition at the end of the third quarter, the US Dollar recouped its losses.
Looking forward, the ISM manufacturing PMI is the focus today. Could signs of improving US factory activity boost USD?
Pound (GBP) Fluctuates despite GDP Revision
The Pound (GBP) traded without a clear direction on Friday, as end-of-quarter volatility struck the currency market.
Meanwhile, an upward revision to British GDP failed to provide Sterling with lasting gains as economists warned the UK could still slip into a recession.
The only data out today is the UK’s final manufacturing PMI, which could mute GBP if it confirms another steep contraction in factory activity.
Euro (EUR) Rebounds despite Cooler Inflation
The Euro (EUR) fell on Friday morning after Eurozone inflation cooled more than forecast, thereby denting European Central Bank (ECB) interest rate hike bets.
However, EUR was able to bounce back against many of its peers in the afternoon. A souring market mood lifted the safer single currency.
In addition to the final Eurozone manufacturing PMI, the bloc’s jobless rate is due for publication today. If unemployment holds at a record low, EUR could find support.
Canadian Dollar (CAD) Falls as GDP Flatlines
The Canadian Dollar (CAD) fell sharply on Friday after new GDP data showed that the Canadian economy is stagnating. A drop in oil prices added to the crude-linked currency’s downside.
Turning to today, could a deepening decline in Canadian factory activity weigh on the ‘Loonie’?
Australian Dollar (AUD) Slips as Inflation Misses Forecasts
The Australian Dollar (AUD) stumbled last night as weaker-than-forecast monthly inflation dampened bets on another rate hike from the Reserve Bank of Australia (RBA).
New Zealand Dollar (NZD) Softens Due to AUD Correlation
The New Zealand Dollar (NZD) ticked slightly lower last night as NZD’s positive correlation with AUD led to modest losses for the ‘Kiwi’.