Pound (GBP) softens amid lack of data
The pound (GBP) softened against its stronger peers yesterday as a lack of data left the UK currency without much support.
This exposed GBP to losses, with the currency unable to maintain its recent momentum.
Turning to today, UK data remains in short supply. As a result, Sterling could face uncertain movement once again.
Euro (EUR) limited by USD strength
The euro (EUR) firmed against some of its rivals yesterday, as a pullback in French bond yields helped ease fiscal fears surrounding the Eurozone’s second-largest economy.
However, EUR’s strong negative correlation with the rallying US dollar (USD) limited the currency’s gains in the afternoon, as did a fresh uptick in French borrowing costs.
Looking forward, European Central Bank (ECB) President Christine Lagarde is due to deliver a speech later this morning. If the ECB chief strikes a cautious tone, the euro could weaken.
US dollar (USD) climbs as inflation beats forecasts
The US dollar rebounded yesterday as the latest US inflation figures boosted Federal Reserve interest rate hike bets.
Both the monthly core and headline inflation figures exceeded expectations in October. Following the data, market odds for a 25-basis-point hike in December rose to 90%, with a 10% chance the central bank could raise rates by 50 basis points.
With US data in short supply today, market risk appetite may be the primary driver of USD movement. Could a risk-on mood see the safe-haven currency relinquish some gains?
Canadian dollar (CAD) shored up by USD
The crude-linked Canadian dollar (CAD) was on the back foot yesterday as oil prices continued to fall, although CAD’s positive correlation with USD helped it recover in the afternoon.
Oil price dynamics could continue to drive the Canadian dollar today. If crude continues to retreat, CAD may face headwinds.
Australian dollar (AUD) recovers amid risk-on mood
The Australian dollar (AUD) managed to regain ground overnight as an improving market mood supported the risk-sensitive currency.
New Zealand dollar (NZD) inches higher as sentiment brightens
The New Zealand dollar (NZD) also edged higher during Wednesday’s Asian session as risk appetite improved.
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