Pound (GBP) Sinks as Bailey Suggests Interest Rate Have Peaked
The Pound (GBP) continued to slide yesterday, as investors continued to pare back their expectations of further rate hikes.
BoE Chief Economist Huw Pill pointed to a ‘stronger than anticipated’ economy in a speech, but did little to inspire GBP.
Today, Sterling may be left vulnerable to market sentiment. With data thin on the ground, declining optimism around Brexit may weigh on GBP.
Euro (EUR) Stumbles on Falling Headline Inflation
The Euro (EUR) weakened yesterday, following the release of the latest Eurozone CPI flashes. The data showed that headline inflation fell to 8.5% in Feb.
However, with core inflation printing at 5.6%, rate hike bets served to underpin the Euro, cushioning against further losses.
This morning, Germany’s balance of trade data for January was released. An above-forecast increase in Germany’s trade surplus could have a positive impact on EUR.
US Dollar (USD) Recovers as US Labour Market Runs Hot
The US Dollar (USD) managed to make a modest comeback on Thursday, following the latest initial jobless claims.
The data for the week ending 25 February printed at 190,000, and showed that the US labour market remained hot. Because of this, Federal Reserve rate hike bets continued to climb.
This afternoon, the ISM non-manufacturing PMI is due to print. With a fall forecast, if the index prints as expected USD could weaken.
Canadian Dollar (CAD) Lifted by Oil Price Recovery
The Canadian Dollar (CAD) strengthened yesterday as oil prices continued to recover after previous falls. A strong showing from the US Dollar lent extra support, due to the pairing’s positive correlation.
Due to a lack of data, the oil-linked ‘Loonie’ may continue to trade on this link. Should oil prices keep rising, CAD could strengthen further.
Australian Dollar (AUD) Ticks Up on Chinese Services Leap
The Australian Dollar (AUD) edged higher overnight, as the Chinese Caixin services index came in far above forecasts.
New Zealand Dollar (NZD) Muted despite Bullish Trade
The risk-sensitive New Zealand Dollar (NZD) traded flatly overnight, despite an upbeat market mood care of strong Chinese data.