US Dollar (USD) Recovers after Hawkish Fed Comments
The safe-haven US Dollar (USD) initially wavered yesterday as the market mood shifted, with weaker US jobs data also putting some pressure on the ‘Greenback’.
However, in the evening Federal Reserve Chair Jerome Powell seemed to strike a more hawkish tone, saying he was ‘not confident’ that interest rates had peaked. This saw USD rally.
This afternoon, the University of Michigan’s consumer sentiment index is expected to edge lower. A more drastic drop could see USD stumble.
Pound (GBP) Quiet after Dovish BoE Comments
The Pound (GBP) struggled yesterday, slipping against its stronger rivals following some dovish comments from Bank of England (BoE) Chief Economist Huw Pill.
Pill indicated that the BoE did not need to raise interest rates higher to bring inflation to heel. This undermined Sterling’s potential.
UK GDP beat forecasts this morning, showing that the British economy stalled in the third quarter rather than contracting. Will this be enough to lift Sterling today?
Euro (EUR) Subdued amid Gloomy Eurozone Outlook
The Euro (EUR) was muted yesterday following fairly gloomy comments from European Central Bank (ECB) Vice-President Luis de Guindos.
De Guindos said that the Eurozone growth outlook is ‘somewhat more negative than we previously projected’, adding to recent fears of a recession in the bloc.
Turning to today, ECB President Christine Lagarde is due to speak. If she echoes her deputy’s downbeat remarks, the single currency could come under firmer pressure.
Canadian Dollar (CAD) Inches Higher in Tandem with Oil
The commodity-linked Canadian Dollar (CAD) found limited success yesterday amid an uptick in oil prices. However, as crude remained sharply lower on the week, CAD’s upside was capped.
Oil prices are likely to continue driving the ‘Loonie’ today amid a lack of Canadian economic data. Could another uptick in oil boost CAD?
Australian Dollar (AUD) Slides as Powell Sours the Mood
The Australian Dollar (AUD) dropped yesterday evening and remained muted overnight after Fed chief Powell’s hawkish comments soured the market mood, thereby denting the risk-sensitive ‘Aussie’.
New Zealand Dollar (NZD) Falls amid Fed Tightening Fears
The New Zealand Dollar (NZD) plunged yesterday evening following Powell’s remarks, while a weaker-than-forecast manufacturing PMI also weighed on NZD overnight.