GBP, EUR and USD waver amid mixed trade

Philip McHugh January 23rd 2023 - 2 minute read

The pound, euro and US dollar all wavered at the end of last week’s trade, with surprising data, central bank expectations, and a bullish tone contributing to the mixed movement.

As this week kicks off the pound is mixed. GBP/EUR is down at €1.1392 while GBP/USD is up at $1.2413. GBP/CAD and GBP/NZD are fairly flat at CA$1.6574 and NZ$1.9155, respectively, while GBP/AUD has dropped to AU$ 1.7735.

Looking ahead, the Eurozone’s latest consumer confidence reading may lift the single currency today if it shows an improvement in morale this month.

What’s been happening?

The US dollar looked like it was going to make some progress early on Friday as an uptick in US Treasury yields boosted the ‘greenback’. However, the safe-haven currency eventually succumbed to a risk-on market mood, slipping lower overall.

The pound dropped at the start of Friday’s session following a shock contraction in UK retail sales in December. Rather than growing 0.5% as was expected, the data printed at -1%.

Still, Sterling was able to recoup some losses amid the upbeat market mood, with GBP holding near monthly highs.

Meanwhile, the euro also faced mixed movement on Friday. Hawkish expectations from the European Central Bank (ECB) underpinned the common currency, while Russia-Ukraine worries limited any upside potential.

What’s coming up?

Only the Eurozone will see any notable data releases today. First up, the bloc’s latest consumer confidence indictor could give the euro a modest boost as forecasters expect a slight improvement in the first reading of 2023.

Later in the evening, ECB President Christine Lagarde is due to speak. Could further hawkish comments from the bank’s chief boost the single currency?

Domestic UK headlines may drive the pound today, with any more news of intensifying strike action potentially weighing on Sterling.

As for the US dollar, risk appetite could be the defining factor in USD exchange rates.

Tomorrow brings a more packed data calendar, with the flash PMIs for the UK, US and Eurozone due out. Today’s movement could be calm in comparison.

Written by
Philip McHugh

Select a topic: