Pound (GBP) Strengthens amid Red Hot Labour Data
Amid a bevy of better-than-expected labour data, the Pound (GBP) strengthened against most major peers yesterday.
Wage growth especially boosted Sterling. With this considered a key inflationary pressure by the Bank of England (BoE), the increase in April underpinned the likelihood of additional tightening in the near future.
This morning, the latest UK GDP data printed at 0.2%, in line with forecasts. Could this cheery news for the UK economy underpin Sterling through today’s session?
Euro (EUR) Underpinned by Rate Hike Bets
Increased interest rate hike bets continued to support the Euro (EUR) yesterday. Investors are, by now, convinced that the European Central Bank (ECB) will hike rates at their imminent meeting.
Furthermore, an increase in the German economic sentiment index may have brought additional support. While the index remained in negative territory, the report indicated that the economic situation in Germany is improving.
The is an absence of notable EUR data scheduled for today, but the Euro may remain afloat amid continued rate hike bets.
US Dollar (USD) Weakens as CPI Cooldown Secures Fed Pause
Investors now fully expect the Federal Reserve to enact a pause at their meeting, which weakened the US Dollar (USD) during Tuesday’s session.
Both core and headline inflation cooled, with the monthly core inflation data remaining unchanged. Because of this, investors now believe the Fed will put the breaks on their current tightening cycle.
Ahead of the Fed’s interest rate decision later this evening, the latest US PPI data could provide some impetus. A fall is forecast, which may weigh on USD.
Canadian Dollar (CAD) Supported by Oil Price Recovery
A recovery in oil prices supported the Canadian Dollar (CAD) yesterday, alongside increased bets on further tightening from the Bank of Canada (BoC).
The data calendar is set to remain thin today, meaning that oil price dynamics could continue to drive the ‘Loonie’.
Australian Dollar (AUD) Gains Ground on Chinese Economic Stimulus Hopes
The Australian Dollar (AUD) posted gains in overnight trade, amid hopes of further Chinese economic stimulus.
New Zealand Dollar (NZD) Firms on Cautiously Upbeat Trade
The risk-sensitive New Zealand Dollar (NZD) also firmed in overnight trade, due to an upbeat market mood.