Pound (GBP) Firms following Inflation Data
The Pound (GBP) strengthened against the majority of its peers yesterday as UK inflation rose by more than expected, paving the way for another rate hike at the Bank of England’s (BoE) next policy meeting.
In addition, Boris Johnson announced the end of Plan B coronavirus restrictions from 27 January, which provided another boost for the Pound.
With no UK data due out today, GBP investors may continue to mull over yesterday’s CPI release and comments from BoE Governor Andrew Bailey.
Euro (EUR) Wavers on Mixed EUR Sentiment
The Euro (EUR) was muted yesterday as rising Covid cases and EU-Russia tensions weighed on EUR investors’ minds.
However, a weaker US Dollar (USD) helped to buoy the Euro due to the currencies’ negative correlation. As a result, EUR exchange rates fluctuated.
Looking ahead, EUR investors will likely be awaiting the latest meeting minutes from the European Central Bank (ECB). A dovish tone could dent the Euro.
US Dollar (USD) Softens amid Risk-Positive Trade
The US Dollar ticked lower during yesterday’s session as a slight increase in risk appetite among European markets put pressure on the safe-haven currency.
A lack of market-moving US data also left the ‘Greenback’ vulnerable to losses.
Turning to today, the latest US initial jobless claims could prompt some movement. Economists expect claims to have edged down last week, after unexpectedly rising the week before.
Canadian Dollar (CAD) Wavers as Inflation Meets Forecasts
The Canadian Dollar (CAD) rose ahead of Canada’s inflation rate yesterday only to shed those gains after the CPI printed as expected, with investors seemingly hoping for a higher reading ahead of the Bank of Canada’s (BoC) interest rate decision next week.
Coming up, we have Canada’s latest ADP jobs data. Markets expect another strong rise in employment, which could boost the ‘Loonie’.
Australian Dollar (AUD) Firms on Upbeat Jobs Data
The Australian Dollar (AUD) edged up overnight as the Australian unemployment rate dropped from 4.6% to 4.2%, beating forecasts of 4.5%.
New Zealand Dollar (NZD) Slips as NZ Closes its Borders
The New Zealand Dollar (NZD) lost ground overnight as New Zealand has temporarily closed borders to new arrivals in an attempt to protect the country from Omicron.