US Dollar (USD) slumps amid risk-on rally
The US Dollar faced heavy selling pressure yesterday as a risk-on market mood sapped demand for the safe-haven currency.
Ongoing bets on a March rate cut from the Federal Reserve also weighed on USD, driving it lower across the board.
Looking ahead, the latest US consumer confidence data is due out this afternoon. Will an expected improvement in morale boost USD? Or could it add to the cheery mood, thereby denting the currency?
Pound (GBP) mixed despite hawkish BoE comments
The Pound (GBP) faced mixed movement yesterday. Hawkish comments from Bank of England (BoE) Deputy Governor Ben Broadbent supported GBP, while a warning about the UK’s economic outlook stifled Sterling.
However, the increasingly risk-sensitive currency managed to firm against its safer peers amid an upbeat market mood.
Sterling is off to a poor start so far this morning after a larger-than-expected fall in UK inflation last month dampened BoE interest rate expectations.
Euro (EUR) pressured by easing inflation
The Euro (EUR) slipped against its stronger peers yesterday after the Eurozone’s final CPI confirmed a sharp cooldown in inflation last month, thereby dampening European Central Bank (ECB) interest rate expectations.
However, EUR’s strong negative correlation with the US Dollar (USD) lent the single currency some support, cushioning its losses.
Germany’s latest consumer confidence figures are lending some support to the Euro at the start of today’s session as sentiment in the Eurozone’s largest economy rose to a five-month high.
Canadian Dollar (CAD) muted despite strong CPI
The Canadian Dollar (CAD) was muted on Tuesday, softening against its stronger peers, despite rising oil prices and hotter Canadian inflation data. CAD seemed to be dragged down by its positive correlation with USD.
This evening, the Bank of Canada (BoC) will publish its most recent meeting minutes. Could talk of rate cuts see the ‘Loonie’ slide?
Australian Dollar (AUD) rallies in bullish trade
The Australian Dollar (AUD) trended higher overnight on Tuesday as an upbeat market mood helped to bolster the appeal of the risk-sensitive currency.
New Zealand Dollar (NZD) strengthens amid upbeat mood
The New Zealand Dollar (NZD) also firmed in overnight trade as the ‘Kiwi’ was underpinned by an optimistic market mood.