US Dollar Hits Multi-Month Lows as Market Mood Improves

US Dollar (USD) Slumps amid Cheery Trade

The US Dollar (USD) declined yesterday after stronger-than-forecast US consumer confidence data cheered markets, thereby sapping the safe-haven currency’s appeal.

The ‘Greenback’ also remained under pressure following the recent sharp decline in US Treasury yields.

This afternoon, the latest estimate for US GDP is due out. Could confirmation of strong growth in the third quarter boost USD exchange rates?

Pound (GBP) Buoyed by Upbeat Sentiment

The Pound (GBP) initially traded without a clear direction on Tuesday amid a lack of UK economic data.

Later in the session, a sharp improvement in market sentiment boosted the increasingly risk-sensitive Pound against its safer rivals.

UK data remains thin on the ground today. As a result, Sterling may struggle to find a clear trajectory.

Euro (EUR) Undermined by Risk-On Mood

The Euro (EUR) enjoyed modest success yesterday after German consumer confidence improved more than forecast heading into December.

However, a risk-on mood swept markets later in the session, which saw the safer Euro slip against many of its riskier peers.

Looking forward, Germany’s inflation rate for November is due out this afternoon. Could an expected cooldown dent European Central Bank (ECB) interest rate hike bets and see EUR slump?

Canadian Dollar (CAD) Fluctuates amid Oil Price Volatility

The crude-linked Canadian Dollar (CAD) initially firmed yesterday as oil prices rose. However, oil volatility later in the session saw CAD shed its earlier gains.

With Canadian data in short supply today, oil price dynamics may continue to drive CAD exchange rates.

Australian Dollar (AUD) Slides as Inflation Cools Sharply

The Australian Dollar (AUD) fell sharply overnight after Australia’s latest inflation reading showed a steeper-than-forecast drop in inflation last month, thereby dampening Reserve Bank of Australia (RBA) rate hike bets.

New Zealand Dollar (NZD) Surges amid Hawkish RBNZ Hints

The New Zealand Dollar (NZD) leapt higher last night after the Reserve Bank of New Zealand (RBNZ) indicated that it may hike rates in early 2024.

Samuel Birnie

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