Pound (GBP) Rebounds from Recent Lows
The Pound (GBP) got off to a positive start this week, recouping some of its losses from last week’s Bank of England (BoE) rate decision.
There didn’t immediately appear to be any clear catalyst for the move, suggesting it may be driven by investors seeking to pick up a bargain.
With UK data thin on the ground today, the Pound could struggle to attract support, particularly if Brexit headlines remain broadly negative.
Euro (EUR) Subdued Following ECB Commentary
The Euro (EUR) was mostly muted on Monday, in response to some dovish comments by from European Central Bank (ECB) chief economist Philip Lane.
Lane argued that an ‘abrupt tightening of monetary policy’ in response to the recent surge of inflation in the Eurozone would be counterproductive, with Lane’s comments further dampening hopes the ECB could soon start
Looking ahead, the Euro could stumble today as Germany’s ZEW economic sentiment index is expected to report another deterioration of sentiment this month.
US Dollar (USD) Undermined by Improving Risk Appetite
The US Dollar (USD) fell back against the majority of its peers yesterday, as a prevailing risk-on mood sapped demand for the safe-haven currency.
This upbeat market mood was primarily driven by optimism over a new pill developed by US company Pfizer to treat Covid-19, which has proved 89% effective in clinical trials.
However the US Dollar may be able to mount a recovery later today, with the release of the latest US PPI figures. A strong rise in producer prices last month is likely to bolster expectations for tomorrow’s inflation figures.
Canadian Dollar (CAD) Struggles as Investors Reprice Rate Hike Bets
The Canadian Dollar (CAD) slipped at the start of the week as investors repriced expectations for less aggressive rate hikes in 2022 from the Bank of Canada (BoC).
As markets widely expect one rate hike from the Federal Reserve in 2022, many investors adjusted bets for fewer interest rate rises from the BoC.
Australian Dollar (AUD) Bolstered by Risk-On Trade
After strengthening through yesterday’s European session amid an upbeat market mood, the risk-sensitive Australian Dollar (AUD) dipped overnight before recovering this morning.
The Chinese trade surplus for October soaring to a record high of $84.54 billion, and the NAB business confidence index hitting its highest level since April supported the ‘Aussie’.
Consumer confidence data for November released tonight may cause some additional movement in AUD, with forecasts pointing to little change on October’s reading.
New Zealand Dollar (NZD) Strengthens amid Risk-On Mood
The New Zealand Dollar (NZD) also made solid gains through yesterday’s session before slipping slightly overnight.
NZD exchange rates were bolstered by yesterday’s risk-on mood before lower commodity prices dented the ‘Kiwi’ slightly.
Data Releases
07:00 EUR German Trade Balance (Sep)
10:00 EUR German ZEW Economic Sentiment Index (Nov)
13:00 EUR ECB Lagarde Speech
13:30 USD PPI (Oct)