Pound (GBP) edges higher amid energy price implications
The pound (GBP) traded with modest support against most of its peers yesterday as GBP investors continued to price in the potential implications of the sharp rise in energy prices.
While most analysts believe potential inflationary risks will discourage the Bank of England (BoE) from making further interest rate cuts in the short term, they are also worried about the potential adverse impact on the UK’s fledgling economic recovery.
With notable UK economic releases in short supply, the pound may be left to trade without directional bias today.
Euro (EUR) slides following retail sales shock
The euro (EUR) remained muted on Thursday after the Eurozone’s latest retail sales figures reported an unexpected contraction in consumer spending at the start of the year.
This fed into wider weakness in the single currency yesterday as rising European energy prices continued to unsettle EUR investors.
The euro may face additional headwinds today, as Germany is expected to report a sharp decline in factory orders in January.
US dollar (USD) bolstered by geopolitical uncertainty
The US dollar (USD) trended higher through yesterday as uncertainty surrounding the war in the Middle East continued to underpin the safe-haven currency.
The latest US initial jobless claims also supported these gains, after they reported new claims held at 213,000 last week.
Turning to today’s session, the release of last month’s US payroll figures will be the primary focus for USD investors, with the US dollar already reversing some of its recent safe-haven gains amid forecasts that the US jobs market cooled in February.
Canadian dollar (CAD) bolstered by rallying oil prices
The Canadian dollar (CAD) maintained a positive trajectory on Thursday as it continued to be underpinned by rising oil prices.
Coming up, in addition to further oil-linked gains, the ‘loonie’ may also be strengthened at the end of this week by an uptick in Canada’s latest Ivey PMI.
Australian dollar (AUD) bolstered by pullback in USD
The Australian dollar (AUD) rallied overnight on Thursday as a softening of the US dollar ahead of the latest US payroll figures allowed the risk-sensitive currency to appreciate.
New Zealand dollar (NZD) buoyed amid improving mood
The New Zealand dollar (NZD) also trended higher in overnight trade amid the modest improvement in market risk sentiment.
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