Pound (GBP) strengthens on BoE commentary
The pound (GBP) traded unevenly for much of yesterday’s session before gaining traction later in the day, supported by remarks from Bank of England (BoE) officials.
BoE Governor Andrew Bailey remarked that the Bank’s March policy decision ‘genuinely remains an open question’, while Chief Economist Huw Pill and rate-setter Megan Greene highlighted persistent upside risks to inflation.
With no notable UK data due today, Sterling may struggle for clear direction as investors look ahead to tomorrow’s key by-election in Greater Manchester.
Euro (EUR) unsettled amid Russia-Ukraine tensions
The euro (EUR) fluctuated during yesterday’s trading, with an absence of fresh Eurozone data leaving the single currency susceptible to swings and under pressure against firmer counterparts.
Lingering concerns over the Russia-Ukraine conflict weighed on EUR sentiment after the Kremlin reiterated its commitment to military objectives on the fourth anniversary of its full-scale invasion.
This morning, the euro has come under renewed pressure after German consumer confidence unexpectedly weakened heading into March.
US dollar (USD) drifts amid shifting risk mood
The US dollar (USD) delivered a mixed performance yesterday but edged higher against softer rivals as changes in market sentiment and ongoing tariff uncertainty influenced trade.
An initial bout of risk aversion, driven by concerns over the global trade implications of fresh US tariffs, offered support to the safe-haven currency. However, stronger-than-expected US data later in the session improved investor confidence and limited the American dollar’s upside.
With little in the way of US data scheduled today, broader market risk appetite is likely to steer the ‘greenback’.
Canadian dollar (CAD) slips as oil fluctuates
The oil-sensitive Canadian dollar (CAD) lost ground yesterday amid volatile crude prices, with the currency trending lower overall.
In the absence of domestic data releases, movements in the oil market are set to remain the primary driver for CAD. Should prices climb on the back of US-Iran tensions, the ‘loonie’ could find renewed support.
Australian dollar (AUD) jumps on inflation surprise
The Australian dollar (AUD) advanced sharply overnight, reaching fresh one-year highs against several peers, after Australian inflation came in above expectations. The stronger reading fuelled speculation that the Reserve Bank of Australia (RBA) may need to tighten policy again.
New Zealand dollar (NZD) advances in upbeat trade
The New Zealand dollar (NZD) also moved higher overnight, buoyed by improved market sentiment and its positive correlation with the Australian dollar.
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