Pound (GBP) directionless amid sparse UK data
The pound (GBP) was mixed yesterday as the absence of UK economic releases left the currency without any strong impetus.
A risk-on mood across markets saw Sterling lose ground against more risk-sensitive currencies, while it held firmer against safer counterparts, as hopes grew that the crisis in the Middle East may ease sooner than previously thought.
With the UK data calendar remaining light today, the pound may continue to trade without a clear direction.
Euro (EUR) pressured by weak German export figures
The euro (EUR) fell against stronger rivals yesterday after data revealed that German exports contracted by 5.9% in January, fuelling fresh concerns over the health of the Eurozone’s largest economy.
At the same time, EUR drew some support from lower energy prices, which helped calm fears that an energy shock could weigh heavily on growth in the bloc.
Looking to today, energy prices are ticking higher once again as the conflict in the Middle East continues with little sign of easing.
US dollar (USD) softens as safe-haven demand fades
The US dollar (USD) moved lower again yesterday as hopes for an end to the conflict involving Iran reduced demand for the safe-haven currency.
Although uncertainty persists over how long tensions in the Middle East may last and what the longer-term effect on oil prices could be, the more upbeat market backdrop dominated trading.
Attention now turns to the latest US CPI release, which is expected to show that inflation held steady in February. Any unexpected reading could trigger volatility for USD. Meanwhile, renewed market caution has helped the ‘greenback’ regain some support.
Canadian dollar (CAD) steady as oil finds support
The oil-linked Canadian dollar (CAD) weakened at first yesterday as crude prices extended their retreat from recent peaks. However, as oil later found some stability, the ‘loonie’ was able to recover its footing.
The Canadian dollar may continue to take its cue from oil price movement today. If crude edges higher on the back of renewed concern over the Iran conflict, CAD could strengthen.
Australian dollar (AUD) lifted by improving market sentiment
The Australian dollar (AUD) pushed higher overnight, supported by stronger risk appetite and firmer commodity prices.
New Zealand dollar (NZD) struggles to hold initial gains
The New Zealand dollar (NZD) rose at first during overnight risk-positive trade, but the ‘kiwi’ was unable to sustain its upside momentum.
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