Pound (GBP) Stumbles amid Declining BoE Bets
The Pound (GBP) softened yesterday as expectations of a more dovish approach from the Bank of England (BoE) sapped Sterling’s appeal.
With the UK’s economic outlook growing bleaker, and amid signs that global inflationary pressures are easing, markets expect the BoE to soften its stance at upcoming meetings.
This morning, the UK’s latest wage growth figures exceeded expectations to rise to a six-month high. Could this reignite BoE rate hike bets, thereby boosting the Pound?
Euro (EUR) Mixed following Fall in German Wholesale Prices
The Euro (EUR) traded without a clear directional bias yesterday as EUR investors grappled with a larger-than-forecast decline in German wholesale prices.
While the data offered fresh evidence that Eurozone inflation is cooling, recent hawkish rhetoric from European Central Bank (ECB) officials underpinned the common currency. This protected EUR from heavy losses.
Looking ahead, Germany’s ZEW economic sentiment indicator could boost the Euro. The score is expected to improve for the fourth month in a row to hit its highest level since February 2022.
US Dollar (USD) Rises in Tandem with Treasury Yields
The US Dollar (USD) ticked higher yesterday, despite American markets being closed for Martin Luther King Jr. Day.
The upside came as US bond yields rose, with the yield on the 10-year Treasury note recovering from a one-month low.
A speech from the Federal Reserve’s John Williams this evening could impact USD. Until then, risk appetite may drive most movement the safe-haven ‘Greenback’.
Canadian Dollar (CAD) Rises alongside USD
The Canadian Dollar (CAD) rose yesterday, despite muted oil prices and government bond yields. The upside came courtesy of CAD’s increasingly positive correlation with USD.
An expected decline in Canada’s inflation rate this afternoon could hurt the ‘Loonie’ by dampening Bank of Canada (BoC) rate rise bets.
Australian Dollar (AUD) Mixed despite China GDP
The Australian Dollar (AUD) traded without a clear direction overnight. Despite Chinese GDP data beating forecasts, a cautious market mood capped gains for the China-proxy ‘Aussie’ Dollar.
New Zealand Dollar (NZD) Rises following Chinese Data
The New Zealand Dollar (NZD), however, strengthened in overnight trade, with NZD investors cheering China’s positive data and shrugging off wider concerns.