Pound Strengthens as BoE’s Bailey Reiterates Hawkish Stance

Pound (GBP) Strengthens on Rate Hike Expectations 

The Pound (GBP) firmed yesterday, as last week’s Bank of England (BoE) policy decision, which led analysts to expect a rate hike in early 2022, continued to act as a tailwind.

Sterling held its gains in the afternoon following more hawkish comments from BoE Governor Andrew Bailey, who again signalled that the bank may raise the interest rate relatively soon. 

With no notable UK data out today, any new developments in the UK’s supply chain crisis could affect Sterling. 

Euro (EUR) Dips on Dovish ECB 

The Euro (EUR) struggled through yesterday’s session as a lack of notable data left the single currency vulnerable to losses. 

Some dovish comments from the European Central Bank (ECB) President Christine Lagarde also weighed on the Euro, with Lagarde reiterating her belief that current inflationary pressures are temporary. 

Turning to today, the Euro seems subdued this morning, despite German consumer confidence beating forecasts. With a handful of ECB policymakers due to speak today, any hawkish or dovish comments could influence EUR. 

US Dollar (USD) Wavers on Mixed Market Mood 

The US Dollar (USD) had a mixed session yesterday, as an ambivalent market mood saw the safe-haven ‘Greenback’ waver. 

USD initially firmed, however the better-than-expected US durable goods orders data seemed to cheer global markets, thereby denting the US Dollar. 

Later today, US consumer confidence is expected to rise and Federal Reserve Chair Jerome Powell will testify in front of the US Senate, both of which could boost USD exchange rates. 

Canadian Dollar (CAD) Ticks Higher in Tandem with Oil Prices 

The Canadian Dollar (CAD) made modest gains against many of its rivals yesterday as oil prices climbed at a slow, steady rate. 

With oil now trading at over $76 a barrel, and more price increases expected, the commodity-linked Canadian Dollar could make further gains today. 

Australian Dollar (AUD) Down amid Retail Sales Contraction 

The Australian Dollar (AUD) spiked and then fell back in overnight trade as Australian retail sales contracted by 1.7% in August and market mood soured somewhat. 

New Zealand Dollar (NZD) Stumbles on Risk-Off Market Mood 

The New Zealand Dollar (NZD) slipped in the overnight session, as a bearish shift in market mood dented the risk-sensitive ‘Kiwi’.