Pound (GBP) Rallies on Renewed Rate Hike Bets
The latest employment data sent the Pound (GBP) on a rally yesterday, as the UK’s labour market remained tight.
The unemployment rate held at 3.7%, below pre-pandemic levels. Similarly, more jobs were created than expected. Furthermore, with wage growth above forecasts, pressure increased on the Bank of England (BoE) to keep trying to temper inflation.
The UK’s latest inflation data printed at 10.1% this morning, softer than expected, thereby denting BoE rate rise bets. As investors continue to digest the release, GBP could weaken.
US Dollar (USD) Buoyed amid Hotter-than-Expected Inflation
The US Dollar (USD) gained ground on Tuesday, following the release of the latest CPI data for January.
Predicted to cool to 6.2%, headline inflation printed at 6.4%, only falling by 0.1% from the previous month. As such, USD investors bet on further rate hikes from the Federal Reserve as inflation seems stickier than expected.
Retail sales data for January is due to print this afternoon, which could boost the ‘Greenback’ if the forecast 1.8% increase proves true.
Euro (EUR) Underpinned by Upbeat Data
The Euro (EUR) was underpinned on Tuesday, courtesy of a series of positive data releases across the Eurozone.
With GDP estimates confirming an expansion, the outlook seemed cheery. Furthermore, the Eurozone’s labour market appeared strong and German wholesale prices ticked higher, leaving room for investors to renew rate hike expectations.
European Central Bank (ECB) President Christine Lagarde is due to deliver a speech this afternoon. Could a hawkish stance on rate hikes bolster the common currency?
Canadian Dollar (CAD) Dragged Down by Oil Price Slump
The commodity-linked Canadian Dollar (CAD) weakened on Tuesday, following an oil price slump prompted by the US releasing some of its crude reserves.
The ‘Loonie’ may continue to trade on oil prices today, as markets digest the move.
Australian Dollar (AUD) Slumps as RBA Governor Lowe Fails to Inspire
The Australian Dollar (AUD) weakened in overnight trade, despite a hawkish speech from Reserve Bank of Australia (RBA) Governor Phillip Lowe.
New Zealand Dollar (NZD) Slides amid Cautious Market Mood
The risk-sensitive New Zealand Dollar (NZD) fell overnight, as the market mood began to turn bearish.