Pound (GBP) trades unevenly amid data drought
The pound (GBP) moved within a broad range yesterday as the continued absence of UK economic releases left the currency without a clear driver.
Sterling’s performance was also uneven as markets weighed the potential economic fallout from the ongoing Middle East conflict, which could have implications for UK growth, interest rates and public finances.
Looking to today, Bank of England (BoE) Governor Andrew Bailey is scheduled to speak this morning. Should he hint that the recent jump in oil prices may discourage the bank from lowering interest rates again in the near term, the pound may strengthen.
Euro (EUR) edges lower as USD rebounds
The euro (EUR) lost ground yesterday as the single currency’s strong inverse relationship with the resurgent US dollar (USD) applied pressure.
Rising energy costs also undermined the euro, as renewed concerns emerged over how higher energy prices might affect the Eurozone economy.
With little in the way of Eurozone economic releases today, EUR movement may largely reflect shifts in the US dollar and broader market sentiment.
US dollar (USD) supported by cautious market mood
The US dollar gained ground yesterday as signs of escalating tensions in the US-Israeli conflict with Iran dampened investor appetite for risk.
At the same time, the latest US consumer price index indicated that inflation remained persistent in February, prompting markets to slightly scale back expectations for Federal Reserve interest rate cuts.
Apart from the publication of the latest initial jobless claims data, global risk appetite may be the primary influence on USD today, with developments in the Middle East likely to shape market sentiment.
Canadian dollar (CAD) mixed as oil prices fluctuate
The oil-linked Canadian dollar (CAD) traded without a clear direction yesterday as volatile oil prices created choppy conditions.
In the absence of notable Canadian economic data today, the ‘loonie’ is likely to remain sensitive to movements in crude prices. Continued swings in oil could leave the currency lacking a consistent trend.
Australian dollar (AUD) loses momentum amid cautious trade
The Australian dollar (AUD) drifted overnight, struggling to extend recent gains as a more cautious market mood limited demand for risk-sensitive currencies.
New Zealand dollar (NZD) supported by RBNZ rate expectations
The New Zealand dollar (NZD) also saw some fluctuation during the Asian session, although it managed modest gains against several peers. Expectations that inflation pressures could encourage the Reserve Bank of New Zealand (RBNZ) to raise interest rates later this year helped underpin the currency.
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