Pound (GBP) Sinks as Bailey Suggests Interest Rates May Have Peaked
The Pound (GBP) weakened yesterday, following a notably dovish speech from Bank of England (BoE) Governor Andrew Bailey.
In his speech, Bailey implied interest rates may have peaked and reasserted the need for a data driven approach. In reaction, GBP investors pared back their bets on higher rate hikes and sold Sterling aggressively.
BoE Chief Economist Huw Pill is due to speak this afternoon. If he diverges from Bailey’s view and takes a hawkish stance, GBP may regain some ground.
Euro (EUR) Rallies on Sticky German Inflation
The Euro (EUR) strengthened yesterday, following the release of February’s German inflation data. Headline inflation unexpectedly held at 8.7%, prompting elevated rate hike bets.
On the back of French and Spanish upticks in inflation, the data led to further pressure on the European Central Bank (ECB).
This morning, the latest CPI data for the Eurozone is due to release. Core inflation is expected to hold at 5.3%, which may prompt further strength in the single currency.
US Dollar (USD) Stumbles on US PMI Miss
The US Dollar (USD) struggled for support yesterday, following the release of February’s ISM manufacturing PMI.
Printing at 47.7, the index came in a notch below the forecast of 48, reflecting a slowdown in the manufacturing sector. As such, worries flared over the condition of the US economy, and the future of economic growth.
This afternoon, the initial jobless claims data for the previous week is set for release. Another below forecast reading could help to revive USD demand.
Canadian Dollar (CAD) Boosted by Manufacturing Growth
The Canadian Dollar (CAD) gained ground yesterday, after Canada’s latest manufacturing index showed signs of expansion. The index printed at 52.4, above the forecasts of a flat 50.
Due to a lack of data, the oil-linked ‘Loonie’ may trade in tandem with oil prices. Should they continue to rise, CAD could strengthen.
Australian Dollar (AUD) Struggles amid Dismal Market Mood
The Australian Dollar (AUD) fell overnight, as the risk-sensitive ‘Aussie’ succumbed to a bearish market mood.
New Zealand Dollar (NZD) Slips as Risk Appetite Wanes
The risk-sensitive New Zealand Dollar (NZD) struggled for support in overnight trade, as risk appetite softened.