US Dollar (USD) Extends Downside amid Risk-On Mood
The US Dollar (USD) continued its recent downward trend yesterday, striking fresh multi-month lows, as an increase in risk appetite weighed on the safe-haven ‘Greenback’.
The recent pullback in Federal Reserve interest rate hike bets added to USD’s downside, with markets continuing to bet that the Fed is done raising rates.
This evening, the minutes from the US central bank’s meeting earlier this month are due out. If they reveal a broadly dovish consensus among policymakers, the ‘Greenback’ could test new lows.
Pound (GBP) Unclear amid Lack of Data
The Pound (GBP) moved without a clear trajectory on Monday in the absence of any fresh UK economic data.
Meanwhile, ongoing concerns around the health of the UK economy put a little pressure on the Pound while an upbeat mood aided the increasingly risk-sensitive currency.
Today, Bank of England (BoE) Governor Andrew Bailey is due to speak. Could signals that interest rates have peaked see Sterling decline?
Euro (EUR) Limited by Cooling German PPI
The Euro (EUR) was initially subdued yesterday as another drop in German producer price inflation dampened European Central Bank (ECB) interest rate hike bets.
However, EUR was able to edge higher against its weaker peers in the afternoon, thanks to its negative trading relationship with a retreating US Dollar.
Looking ahead, ECB President Christine Lagarde is set to speak this afternoon. Could dovish comments from the ECB chief see the single currency slip?
Canadian Dollar (CAD) Slips despite Rising Oil Prices
The commodity-tied Canadian Dollar (CAD) softened against many of its peers on Monday, despite an uptick in oil prices. It appears CAD was dragged down by its positive correlation with USD.
Today, Canada’s consumer price index is the focus. Could a cooldown in inflation see CAD slide?
Australian Dollar (AUD) Firms following RBA Minutes
The Australian Dollar (AUD) edged slightly higher overnight following the publication of the minutes from the Reserve Bank of Australia’s (RBA) latest meeting. Policymakers at the RBA expressed concern over inflation risks, which helped to boost rate hike bets.
New Zealand Dollar (NZD) Enjoys AUD Correlation
The New Zealand Dollar (NZD) also ticked broadly higher last night thanks to NZD’s positive correlation with AUD and rising commodities prices.