Pound (GBP) Trims Post-Inflation Gains
The Pound (GBP) initially found support yesterday after UK inflation exceeded forecasts, boosting bets on another Bank of England (BoE) interest rate hike.
However, the increasingly risk-sensitive Pound stumbled against some of its stronger peers later on in the session amid a souring market mood.
Turning to today, UK economic data is in short supply. As a result, GBP may trade without a clear direction.
Euro (EUR) Supported amid Risk-Off Mood
The Euro (EUR) managed to rebound against its riskier peers yesterday, with anxious investors flocking to safer currencies, such as EUR.
The common currency’s strong negative correlation with the US Dollar (USD) capped its gains, however, while a speech from European Central Bank (ECB) President Christine Lagarde failed to prompt much movement.
With notable Eurozone data in short supply today, USD movements and risk appetite may continue to drive EUR exchange rates.
US Dollar (USD) Rises as Sentiment Sours
The US Dollar climbed yesterday, with growing anxiety around the violence in the Middle East providing the ‘Greenback’ with safe-haven flows.
A rise in US Treasury yields also bolstered the American currency, as analysts believe rising oil prices may push the Federal Reserve to hike interest rates again.
Fed Chair Jerome Powell is due to speak this evening. If he suggests that fresh inflationary pressures could necessitate further policy tightening, USD could surge.
Canadian Dollar (CAD) Wavers Alongside Oil Prices
The crude-linked Canadian Dollar (CAD) traded in tandem with oil prices yesterday, rising before relinquishing its gains as the session progressed.
Canada’s producer price index is the focus in today’s session. Could a cooldown in PPI last month drag the ‘Loonie’ lower?
Australian Dollar (AUD) Slumps following Poor Jobs Report
The Australian Dollar (AUD) fell sharply overnight after weaker-than-forecast employment data dented Reserve Bank of Australia (RBA) interest rate hike bets.
New Zealand Dollar (NZD) Declines amid Risk-Averse Trade
The New Zealand Dollar (NZD) also fell last night as a gloomy market mood weighed on the risk-sensitive ‘Kiwi’.