Pound (GBP) rises as risk appetite increases
The pound (GBP) strengthened against many of its rivals on Friday, as an improving market mood lifted the increasingly risk-sensitive currency.
As market appetite for risk increased, GBP managed to rise against its safer peers but ceded ground elsewhere.
This morning, Bank of England (BoE) Deputy Governor Ben Broadbent is set to make a speech. If he strikes a dovish chord, Sterling could stumble.
Euro (EUR) undermined by ECB rate cut bets
The euro (EUR) softened on Friday following dovish comments from European Central Bank (ECB) officials.
ECB Vice-President Luis de Guindos said that price pressures were continuing to ease, while influential hawk Isabel Schnabel conceded that a June rate cut was likely, although she did try to dampen bets on back-to-back cuts.
Looking ahead, Eurozone data is thin on the ground during today’s session, which could leave the common currency struggling to find a clear direction.
US dollar (USD) retreats as risk appetite improves
After initially ticking higher on Friday, the US dollar (USD) then stumbled in the afternoon, as an increased appetite for riskier currencies undermined the safe-haven ‘greenback’.
USD’s downside came despite an uptick in US Treasury yields.
Turning to today, four Federal Reserve officials are due to speak this afternoon. Mixed comments from the various policymakers could lead to uncertain USD movement.
Canadian dollar (CAD) dented by USD correlation
The Canadian dollar (CAD) fell on Friday as CAD’s positive correlation with the US dollar dragged it lower.
With Canadian economic data absent form the calendar today, USD movement could drive the ‘loonie’ once again.
Australian dollar (AUD) rises amid risk-on mood
The Australian dollar (AUD) firmed during overnight trade as a cheery market mood lifted the risk-sensitive currency.
New Zealand dollar (NZD) softens ahead of RBNZ decision
The New Zealand dollar (NZD) edged lower overnight, despite the risk-on market mood, as the looming Reserve Bank of New Zealand (RBNZ) interest rate decision put some pressure on NZD.