Pound (GBP) limited amid lack of data
The pound (GBP) was largely muted yesterday, although it managed to edge higher against weaker peers, amid a lack of UK data.
Sterling may have drawn modest support after the OECD raised its UK inflation forecast from 2.5% to 4%, reinforcing expectations that the Bank of England (BoE) may raise interest rates this year.
Turning to today, the pound may be subdued in the wake of the UK’s latest retail sales figures. While sales growth contracted 0.4% in February, the decline was less steep than the 0.7% forecast by economists.
Euro (EUR) falters as German consumer confidence dips
The euro (EUR) slipped against its stronger rivals yesterday as a decline in German consumer confidence weighed on the common currency.
However, EUR was cushioned by hawkish comments from European Central Bank (ECB) policymaker Joachim Nagel, who said the bank could hike rates as soon as April.
Amid a lack of notable Eurozone data in the session ahead, EUR could trade without a clear trajectory today.
US dollar (USD) rises as risk appetite fades
The US dollar (USD) firmed yesterday as an increasingly risk-averse market mood provided USD with safe-haven flows.
The ‘greenback’ may also have garnered support after the OECD said it expects US inflation to hit 4.2% this year, which would likely deter the Federal Reserve from cutting interest rates.
Looking ahead, a forecast fall in US consumer sentiment could weigh on the ‘greenback’ later today. However, the American dollar could stay afloat if markets remain anxious.
Canadian dollar (CAD) undermined by softer inflation forecast
Rising oil prices failed to lift the crude-linked Canadian dollar (CAD) yesterday, as relatively stable Canadian inflation this year could see the Bank of Canada (BoC) take a less hawkish approach than its global counterparts.
Oil price movements are likely to be a key driver of CAD movement today. If fading peace hopes see crude climb higher, the ‘loonie’ could find support.
Australian dollar (AUD) crawls up from multi-month lows
After striking fresh multi-month lows overnight, the Australian dollar (AUD) managed to bounce off its worst levels after US President Donald Trump delayed strikes on Iranian energy sites for a further ten days and claimed talks were going ‘very well’.
New Zealand dollar (NZD) initially weakens as consumer confidence plunges
The New Zealand dollar (NZD) also hit fresh multi-month lows last night amid the risk-off mood and a slump in domestic consumer confidence, before recouping some of its losses.
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