Pound (GBP) wavers higher in risk-on trade
The pound (GBP) wavered higher against many of its rivals yesterday, with Sterling primarily driven by wider market trends.
An upbeat mood aided the increasingly risk-sensitive pound, while GBP also benefitted from weakness in other major currencies.
Sterling ends the week with UK economic data thin on the ground. Therefore, GBP could trade without a clear trajectory.
Euro (EUR) initially buoyed by weaker USD
The euro (EUR) initially rose yesterday as the currency enjoyed its strong negative correlation with a declining US dollar (USD).
However, ongoing worries about Europe-Russia tensions and fading hopes for peace in Ukraine saw the euro slip back in the afternoon.
A surprisingly strong German factory orders print could support the euro this morning. The Eurozone’s latest estimate for third-quarter growth could also impact EUR, particularly if it differs from the previous estimate.
US dollar (USD) remains weak amid Fed rate cut bets
The US dollar remained on the back foot yesterday as markets continued to price in a Federal Reserve interest rate cut next week.
A surprise drop in jobless claims failed to support the ‘greenback’, although it may have cushioned USD from further losses.
Looking ahead, the University of Michigan will release its latest consumer sentiment index this afternoon. Could an expected improvement lend USD some much-needed support?
Canadian dollar (CAD) rebounds as oil prices rise
The crude-linked Canadian dollar (CAD) initially slipped yesterday as it was dragged down by its positive correlation with USD. However, rising oil prices helped CAD recover.
The focus for CAD investors today is Canada’s latest jobless rate. If unemployment climbed from 6.9% to 7% in November, as expected, the Canadian dollar could stumble.
Australian dollar (AUD) extends upside amid risk-on trade
The Australian dollar (AUD) continued to climb overnight, with the risk-sensitive currency enjoying an upbeat market mood.
New Zealand dollar (NZD) underpinned by cheery trade
The New Zealand dollar (NZD) also ticked higher overnight, buoyed by the risk-on sentiment in markets.
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