Euro (EUR) firms despite mixed ECB remarks
The Euro (EUR) ticked higher against many of its rivals yesterday, despite European Central Bank (ECB) Vice-President Luis de Guindos warning of the possibility of a Eurozone recession.
The ECB second-in-command also reiterated that the bank expects to hold interest rates at their current level ‘for a sufficiently long duration’, which boosted the Euro’s appeal.
This morning, the ECB released its latest economic bulletin. The document reinforces the bank’s ‘higher for longer’ policy narrative while arguing that economic growth should pick up in 2024. Could this lift EUR moving forward?
Pound (GBP) stable amid thin trading conditions
The Pound (GBP) was steady yesterday, posting very modest gains against its weaker peers, amid a cautiously upbeat market mood.
A testimony from Bank of England (BoE) Governor Andrew Bailey had little impact on Sterling’s movements, as the BoE chief barely touched on monetary policy.
Today’s session continues this week’s lull in British economic data. Sterling may therefore struggle to find a clear direction.
US Dollar (USD) weakens amid improving mood
The US Dollar (USD) came under pressure yesterday, initially due to a drop in US Treasury yields.
Although yields stabilised later in the session, an improving market mood dampened the safe-haven currency’s appeal.
Looking ahead, the latest US consumer price index is in the spotlight today. Economists expect a modest uptick in headline inflation. Could this be enough to lift the ‘Greenback’?
Canadian Dollar (CAD) undermined by USD correlation
The crude-linked Canadian Dollar (CAD) struggled during yesterday’s session amid volatile oil prices. In addition, CAD was pressured by its positive trading relationship with USD.
With Canadian economic data remaining in short supply today, US Dollar movements and oil prices could continue to drive the ‘Loonie’.
Australian Dollar (AUD) boosted by strong trade data
The Australian Dollar (AUD) rallied overnight thanks to better-than-expected Australian trade data. Strong export growth saw the country’s trade surplus jump to an eight-month high.
New Zealand Dollar (NZD) climbs amid upbeat mood
The New Zealand Dollar (NZD) enjoyed its positive correlation with AUD last night, while cheery trade also boosted the risk-sensitive ‘Kiwi’.