Pound (GBP) mixed as markets digest policy signals
The pound (GBP) moved without a clear trajectory yesterday, amid comments from Prime Minister Keir Starmer and Bank of England (BoE) Governor Andrew Bailey.
Starmer indicated he wants deeper economic ties with the EU, which may have lent GBP support. However, Bailey pushed back on interest rate hike bets, which offset the upside.
Turning to today, Sterling could struggle for a clear direction once again amid a lack of UK economic data.
Euro (EUR) buoyed by USD weakness
The euro (EUR) managed to rise against its weaker rivals yesterday, with EUR enjoying its strong negative correlation with the falling US dollar (USD).
However, the safer single currency softened against some of its riskier rivals amid the risk-on market mood.
Eurozone data is thin on the ground today. As a result, we could see EUR driven by wider market trends.
US dollar (USD) slides amid Iran peace hopes
The safe-haven US dollar fell yesterday as hopes that the war in the Middle East could end soon saw investors favour riskier assets.
Better-than-forecast jobs and retail sales data may have helped cushion USD’s downside, although it wasn’t enough to see the currency recover.
Turning to today, the US dollar has bounced back amid renewed uncertainty about the conflict in the Middle East. We could see further volatility today if risk sentiment continues to shift.
Canadian dollar (CAD) extends losses as oil falls further
The crude-linked Canadian dollar (CAD) fell sharply yesterday as oil prices tumbled in response to hopes the crisis in the Middle East may ease in the coming weeks.
The currency has recouped these losses this morning, however, as crude prices bounce back. If oil continues to climb, CAD could strengthen today.
Australian dollar (AUD) drops despite positive trade data
The Australian dollar (AUD) slipped overnight, despite upbeat trade data, as fresh worries about the Middle East crisis sapped demand for the risk-sensitive ‘Aussie’.
New Zealand dollar (NZD) stumbles amid risk aversion
The New Zealand dollar (NZD) also fell last night amid the deterioration in market sentiment.
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