US Dollar (USD) Slides as Inflation Continues to Cool
The US Dollar (USD) extended its downside yesterday as the Federal Open Market Committee’s (FOMC) dovish meeting minutes released Wednesday night caused lingering headwinds for the currency.
An unexpected decline in US producer price inflation put further pressure on the ‘Greenback’ later in the session. With American inflation continuing to cool rapidly, markets reined in expectations for more Federal Reserve interest rate rises.
Turning to today, could a decline in US retail sales pile more pressure on USD?
Pound (GBP) Weakens following Downbeat GDP
A disappointing GDP report pulled the Pound (GBP) lower yesterday.
New data revealed that the UK economy stalled in February, rather than growing 0.1% as expected, as widespread strike action weighed on productivity. The report dented recent UK economic optimism, thereby hurting GBP.
Sterling could trade without a clear direction today amid a lack of data. Later in the afternoon, a speech from Bank of England (BoE) policymaker Silvana Tenreyro may dent the Pound, as she is one of the most dovish voices on the bank’s Monetary Policy Committee (MPC).
Euro (EUR) Struggles despite Tailwinds
The Euro (EUR) failed to gain ground yesterday, despite its negative correlation to a weakening US Dollar (USD) and better-than-expected Eurozone industrial production.
Russia-Ukraine worries weighed on the single currency, while a risk-on mood also undermined the safer Euro.
With Eurozone data thin on the ground today, Russia news and USD movement could continue to affect EUR exchange rates.
Canadian Dollar (CAD) Cushioned by Upbeat Commodities Market
The Canadian Dollar (CAD) was mixed yesterday. CAD’s positive trading relationship with USD weighed on the ‘Loonie’, while strength in the commodities market supported the resource-linked currency.
Market-moving Canadian data is in short supply today, so CAD may face mixed movement once again.
Australian Dollar (AUD) Retreats amid Profit-Taking
The Australian Dollar (AUD) edged lower overnight, relinquishing some of yesterday’s impressive gains, as the ‘Aussie’ suffered some profit-taking.
New Zealand Dollar (NZD) Underpinned by Risk-On Mood
The New Zealand Dollar (NZD) softened slightly overnight following an unexpected contraction in the country’s manufacturing PMI. However, an upbeat market mood limited the risk-sensitive currency’s losses.