Pound (GBP) uncertain amid lack of data
The pound (GBP) traded without a clear direction yesterday as a lack of UK economic data left the currency rudderless.
As a result, the increasingly risk-sensitive pound was impacted by the market mood, with widespread risk aversion seeing GBP fall against its safer peers.
Today, UK economic data remains in short supply. Therefore, movement in the pound may be mixed once again.
Euro (EUR) capped by USD strength
The euro (EUR) was able to firm against its riskier rivals on Wednesday thanks to the downbeat market mood.
However, EUR’s strong negative correlation with a rising US dollar (USD) saw the single currency trim its gains later in the session.
Looking ahead, European Central Bank (ECB) President Christine Lagarde is due to speak this afternoon. Any dovish comments could drive the euro lower.
US dollar (USD) climbs amid risk aversion
The safe-haven US dollar strengthened yesterday, as the recent risk-on mood in markets fizzled out.
Global investors grew increasingly fearful of the escalation of violence in the Middle East, as Israel intensifies its attacks on Lebanon.
A number of Federal Reserve officials are set to speak later today, including Federal Reserve Chair Jerome Powell. If Powell hints at more interest rate cuts to come, we could see USD stumble.
Canadian dollar (CAD) buoyed by USD correlation
The Canadian dollar (CAD) rose against its weaker peers on Wednesday as the currency enjoyed its positive correlation with USD. However, falling oil prices capped the crude-linked currency’s potential.
Market-moving Canadian data is absent from the calendar today. As a result, CAD could be primarily influenced by oil prices.
Australian dollar (AUD) climbs as risk appetite recovers
The Australian dollar (AUD) strengthened overnight as a recovery in risk appetite boosted the ‘Aussie’.
New Zealand dollar (NZD) rises amid upbeat market mood
Likewise, the risk-sensitive New Zealand dollar (NZD) also gained ground overnight as the market mood improved.