Pound (GBP) Rises in the Run-Up to BoE Meeting
The Pound (GBP) firmed during yesterday’s trade as investors bought into GBP ahead of the Bank of England (BoE) interest rate decision today.
However, concerns about the UK’s new energy cap – which will be announced later this morning – may have limited the Pound’s gains.
The key event today is the BoE’s interest rate decision. Markets are certain the British central bank will raise rates from 0.25% to 0.5%. Sterling could climb as a result, while the BoE’s forward guidance could also influence GBP exchange rates.
Euro (EUR) Climbs as Eurozone CPI Hits Record High
The Euro (EUR) strengthened against the majority of its peers yesterday after the Eurozone’s CPI unexpectedly rose to a record high of 5.1%.
The flash inflation rate reading kindled hopes that the European Central Bank (ECB) may take a more hawkish stance in today’s upcoming policy decision.
While ECB will likely leave rates unchanged, any indication that policymakers are more concerned about upside inflation risks could boost the single currency.
US Dollar (USD) Wavers as Risk Appetite Shifts
The US Dollar (USD) initially fell during yesterday’s session as the safe-haven currency struggled to attract bids amid a risk-on mood.
The ‘Greenback’ was able to recoup some losses in the afternoon, however. A shock drop in US employment saw risk sentiment shift, thereby supporting USD.
Amid a handful of US data releases today, the ISM services PMI could be the most impactful. Did US service-sector activity edge lower last month?
Canadian Dollar (CAD) Wobbles amid Oil Volatility
The commodity-linked Canadian Dollar (CAD) was mixed yesterday amid choppy trade in the oil market as OPEC+ met to set output targets.
With no Canadian data due out today, oil prices could continue to drive movement in the ‘Loonie’.
Australian Dollar (AUD) Softens on Trade Data
The Australian Dollar (AUD) ticked lower overnight as Australia’s trade surplus unexpectedly narrowed.
New Zealand Dollar (NZD) Rangebound amid Tepid Market Mood
The New Zealand Dollar (NZD) wavered in overnight trade, moving sideways overall, amid a mixed sentiment among investors.