Pound (GBP) Firms on BoE Rate Hike Bets
The Pound (GBP) strengthened against many of its peers yesterday, as GBP investors regained confidence that the Bank of England (BoE) was set for aggressive interest rate rises.
Despite BoE Chief Economist Huw Pill’s cautious comments on Wednesday, UK government bond yields soared, with the ten-year gilt hitting its highest level since November 2018.
This morning’s UK GDP data has beaten forecasts, with the UK economy showing the fastest growth in the G7 in 2021. This could support the Pound today.
Euro (EUR) Mixed amid Weaker USD
The Euro (EUR) was mixed during yesterday’s session, with the single currency enjoying its negative correlation to a weaker US Dollar (USD).
However, ongoing tensions on the Russian-Ukranian border weighed on the Euro, with Russia and Belarus beginning joint military drills in what France called a ‘violent gesture’.
With no Eurozone data out today, the single currency could be open to losses.
US Dollar (USD) Volatile following US CPI
The US Dollar (USD) initially softened yesterday as investors awaited the latest US CPI release.
US inflation printed above expectations, triggering volatility in USD. The ‘Greenback’ spiked and then slumped, perhaps suffering from profit-taking.
The US Dollar recovered overnight, and Federal Reserve rate hike bets may underpin it through today’s session. In addition, the latest Michigan consumer sentiment report could affect USD.
Canadian Dollar (CAD) Slips as Oil Prices Fluctuate
The Canadian Dollar (CAD) fell yesterday, as wavering oil prices undermined the commodity-linked ‘Loonie’.
With no key Canadian data out today, movements in the oil market may continue to drive CAD exchange rates.
Australian Dollar (AUD) Dips on Dovish RBA Comments
The Australian Dollar (AUD) slipped overnight as Reserve Bank of Australia (RBA) Governor Philip Lowe pushed back on rate hike bets, saying there’s a ‘big deviation between what we expect to do on rates and what markets expect’.
New Zealand Dollar (NZD) Bounces on Hawkish Hopes for RBNZ
The New Zealand Dollar (NZD) also edged lower in overnight trade. However, hawkish hopes for the Reserve Bank of New Zealand (RBNZ) helped the ‘Kiwi’ regain some ground earlier this morning.