Pound (GBP) ticks higher amid energy price implications
The pound (GBP) found some modest support against many of its currency peers yesterday as markets continued to assess the consequences of the recent surge in energy costs.
While many analysts suggest the inflationary pressures created by higher energy prices could deter the Bank of England (BoE) from implementing further interest rate cuts in the near term, there are also growing concerns about the potential drag on the UK’s seconomy.
In the absence of any major UK data releases, the pound could struggle to find a clear direction during today’s trading session.
Euro (EUR) pressured after retail sales disappointment
The euro (EUR) remained subdued on Thursday following the publication of the Eurozone’s latest retail sales figures, which unexpectedly showed consumer spending declining at the beginning of the year.
This added to broader weakness in the single currency yesterday as climbing European energy prices continued to weigh on investor sentiment toward the euro.
The euro could face further pressure today as Germany is expected to report a notable drop in factory orders for January.
US dollar (USD) supported by geopolitical tensions
The US dollar (USD) moved higher through yesterday’s session as continued uncertainty surrounding the conflict in the Middle East bolstered demand for the traditional safe-haven currency.
Additional support came from the latest US initial jobless claims figures, which indicated new applications for unemployment benefits held steady at 213,000 last week.
Looking ahead, the spotlight today will fall on the release of the latest US non-farm payrolls report, with the US dollar already reversing some of its recent safe-haven gains amid forecasts that the US jobs market cooled in February.
Canadian dollar (CAD) lifted by stronger oil prices
The Canadian dollar (CAD) maintained its upward momentum on Thursday as the commodity-linked currency continued to draw support from firming oil prices.
Later today, alongside any further oil-driven gains, the ‘loonie’ may also receive a boost from forecasts pointing to an improvement in Canada’s latest Ivey PMI reading.
Australian dollar (AUD) gains as USD softens
The Australian dollar (AUD) advanced in overnight trading on Thursday as a slight pullback in the US dollar ahead of the upcoming payrolls release allowed the risk-sensitive currency to move higher.
New Zealand dollar (NZD) supported by firmer risk sentiment
The New Zealand dollar (NZD) also strengthened during overnight trade as a mild recovery in overall market risk appetite helped underpin the currency.
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