Pound (GBP) subdued as quiet calendar offers little support
The pound (GBP) fell against its stronger counterparts yesterday, with a lack of UK economic releases leaving Sterling short of fresh support.
Investors also appeared hesitant to make significant moves on the currency ahead of today’s UK GDP figures.
So far this morning, the GDP release has had little impact on Sterling, despite confirming that economic growth accelerated to 0.7% in the third quarter, in line with expectations. Could the pound find some support as the session progresses?
Euro (EUR) pressured by stronger US dollar
The euro (EUR) fell yesterday, with its negative correlation to the strengthening US dollar (USD) weighing on the single currency.
A renewed increase in French government borrowing costs also unsettled EUR investors, reviving concerns about a potential bond crisis in the Eurozone’s second-largest economy.
With no significant eurozone data due today, the euro may struggle to establish a clear direction.
US dollar (USD) supported by interest rate expectations
The US dollar extended its advance yesterday as expectations grew that the Federal Reserve could implement consecutive interest rate hikes over the next three months.
Following Tuesday’s stronger-than-expected inflation figures, markets continued to anticipate the possibility of a swift monetary tightening cycle from the Fed, providing ongoing support for USD.
Looking ahead, today’s US initial jobless claims data could influence the currency. Could an increase in claims for unemployment benefits weigh on the ‘greenback’?
Canadian dollar (CAD) recovers as oil prices climb
The oil-linked Canadian dollar (CAD) initially struggled yesterday, but managed to edge higher later in the session as crude prices rebounded.
With little Canadian economic data scheduled today, oil market movements may continue to dictate the Canadian dollar’s direction. Further gains in crude prices could provide the currency with additional support.
Australian dollar (AUD) retreats as risk appetite fades
The Australian dollar (AUD) edged lower overnight, with deteriorating market sentiment putting pressure on the risk-sensitive currency.
New Zealand dollar (NZD) slips as caution returns to markets
The New Zealand dollar (NZD) also moved lower last night as a deterioration in risk appetite weighed on the currency.
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