Pound (GBP) Edges Higher as UK Inflation Rises
The Pound (GBP) gained ground yesterday as an unexpected rise in UK inflation increased the likelihood of aggressive action from the Bank of England (BoE).
However, cost-of-living concerns acted as a headwind, causing GBP to wobble and limiting gains.
Looking ahead, new survey data from the British Chambers of Commerce (BCC) shows that most businesses believe the post-Brexit trade deal between the UK and the EU is hurting trade. This could weigh on the Pound today.
Euro (EUR) Softens as Russia-Ukraine Crisis Continues
The Euro (EUR) ticked lower during yesterday’s session as the Russia-Ukraine crisis remained tense.
While Moscow had announced that it was withdrawing troops, Nato accused Russia of actually increasing its forces on the Ukrainian border.
Today, developments in the Russia-Ukraine crisis could continue to influence EUR exchange rates. Additionally, the European Central Bank’s (ECB) latest economic bulletin may also have an impact.
US Dollar (USD) Muted ahead of FOMC Meeting Minutes
The US Dollar (USD) was subdued yesterday as investors awaited the minutes from the latest Federal Open Market Committee (FOMC) meeting.
Even a much stronger-than-expected retail sales report seemed to have little effect on the ‘Greenback’, despite sales recovering by a whopping 3.8% in January.
The FOMC minutes disappointed investors, who were hoping for an aggressively hawkish tone. Instead, Federal Reserve policymakers took a more balanced approach, saying a rate rise was likely ‘soon’ but that any action would be data dependent.
Forecasters expect initial jobless claims to remain low this afternoon, which may bolster USD. However, the situation in Russia could continue to dominate markets.
Canadian Dollar (CAD) Wobbles despite Strong CPI
The Canadian Dollar (CAD) wavered yesterday, losing most of its gains in the afternoon despite rising oil prices and a hotter-than-expected Canadian CPI.
With no market-moving data coming out of Canada today, movements in the crude market may drive the oil-sensitive ‘Loonie’.
Australian Dollar (AUD) Loses Gains amid Reports of Conflict in Ukraine
The Australian Dollar (AUD) initially firmed overnight despite mixed jobs data from Australia.
However, concerns about the Russia-Ukraine crisis saw AUD stumble amid accusations that Ukraine attacked Russian-backed rebels with mortars and grenades.
New Zealand Dollar (NZD) Volatile amid Russia-Ukraine Crisis
The New Zealand Dollar (NZD) also see-sawed in overnight trade, as Russia-Ukraine tensions caused a brief drop in NZD exchange rates.