Euro (EUR) Firms as Market Mood Sours
The Euro (EUR) rose yesterday as a bearish market mood lifted the safer single currency against its more risk-sensitive counterparts.
In addition, a pullback in the US Dollar (USD) lent the Euro support, due to EUR’s strong negative correlation with USD.
This morning, European Central Bank (ECB) President Christine Lagarde is due to speak ahead of the Eurozone’s final inflation reading for October. Could dovish comments and confirmation of a sharp drop in inflation weigh heavily on EUR exchange rates?
Pound (GBP) Attempts Modest Recovery
The Pound (GBP) managed to move higher against its weaker rivals yesterday, recouping some of the losses it suffered following Wednesday’s cooler inflation report.
Hawkish comments from Bank of England (BoE) rate-setter Megan Greene may have helped to keep GBP afloat. Greene raised concerns about the persistence of UK inflation and pushed back on rate cut expectations.
This morning, new data revealed an unexpected contraction in UK retail sales last month. Domestic sales shrank by 0.3%, rather than rising by the same amount. Sterling slumped in response.
US Dollar (USD) Undermined by Weaker Data
The safe-haven US Dollar stumbled yesterday, reversing its initial gains that stemmed from a deterioration in market sentiment.
The downside came as US jobless claims and industrial production both printed worse than expected. Unemployment claims rose while industrial output declined.
This afternoon, a number of Fed officials – including policymakers Michael Barr and Austan Goolsbee – are due to deliver speeches. Could a dovish consensus see USD slide?
Canadian Dollar (CAD) Drops as Oil Prices Slide
The Canadian Dollar (CAD) slumped yesterday as a sharp decline in oil prices pulled the crude-linked ‘Loonie’ lower.
CAD exchange rates could continue to trade on oil price dynamics today. If crude weakens further, the Canadian Dollar may face additional headwinds.
Australian Dollar (AUD) Rangebound amid Quiet Trade
The Australian Dollar (AUD) traded in a narrow range last night as a lack of Australian data and a muted market mood left the ‘Aussie’ without direction.
New Zealand Dollar (NZD) Dented as Commodity Prices Drop
The New Zealand Dollar (NZD) weakened overnight as a decline in some commodities key to the New Zealand economy weighed on NZD exchange rates.