Pound (GBP) Falls following BoE Decision
The Pound (GBP) dipped in yesterday’s session, after the Bank of England (BoE) maintained its dovish stance in its interest rate decision.
While the BoE’s decision to keep interest rates unchanged at 0.1% was expected, the dovish accompanying statement disappointed GBP investors. The bank described the current high rate of inflation as transitory and didn’t address possible tapering dates.
The Pound could find some support from the Confederation of British Industry’s (CBI) latest distributive trade index this afternoon, but this may be offset by rising coronavirus cases across the UK.
Euro (EUR) Buoyed by German Ifo Business Confidence
The Euro (EUR) gained against many of its counterparts yesterday, as the German business climate figures beat market forecasts.
Business optimism in Germany grew to 101.8 last month, beating market expectations of 100.6 to climb to its highest level since November 2018 and giving the Euro a boost.
The single currency also benefitted from its negative correlation to the US Dollar (USD), as demand for the ‘Greenback’ waned.
Today the Euro could make further gains as the latest GfK consumer confidence figures from Germany also beat projections, rising to -0.3 rather than the expected -4.
US Dollar (USD) Dampened by Lacklustre Data
The US Dollar was on the defensive during yesterday’s session amid a more upbeat market mood and some disappointing data releases from the US.
Both the durable goods orders and initial jobless claims from the US failed to meet market expectations, causing concern around the speed of America’s economic recovery and weighing on the ‘Greenback’.
The PCE price index for last month could give the US Dollar some support today, if it shows that US inflation continues to rise.
Canadian Dollar (CAD) Weakens despite Stable Oil Prices
The Canadian Dollar (CAD) weakened yesterday, despite WTI crude recovering from a dip during the morning to hold steady at above $73 a barrel.
Australian Dollar (AUD) Firms amid Risk-On Sentiment
The Australian Dollar (AUD) climbed in overnight trade, hitting a 10-day high against the Pound, amid an increased appetite for risk.
New Zealand Dollar (NZD) Strengthens on Upbeat Market Mood
The New Zealand Dollar (NZD) also ticked higher overnight, buoyed by the prevailing bullish market mood.