Pound (GBP) Undermined by Growth Warning
The Pound (GBP) stumbled on Wednesday in response to bleak UK economics forecast from the National Institute of Economic and Social Research.
The thinktank warned the UK faces five years of ‘lost growth’ and that the is a risk of the UK slipping into a recession in 2024.
Sterling may be characterised by directionless trade today, as GBP investors look ahead to tomorrow’s GDP data.
Euro (EUR) Fluctuates in Tandem with US Dollar
The Euro (EUR) fluctuated over the course of yesterday’s session, mostly as a result of its negative correlation with the US Dollar (USD).
Despite a lack of data, the common currency managed to strengthen towards the end of the European session as the ‘Greenback’ weakened.
The common currency could struggle for support today, due to the imminent US inflation release. As EUR shares a negative correlation with the US Dollar (USD), it could weaken if USD rallies.
US Dollar (USD) Capped by Dovish Fed Speech
Dovish comments from Federal Reserve policymaker Patrick Harker continued to weigh on the US Dollar yesterday.
However the ‘Greenback’ still found some support amid the uncertainty which came after data showed China slipped into deflation last month.
This afternoon, the US will publish its consumer price index. With headline inflation forecast to increase, Fed rate hike bets may be reignited, bringing strength to the ‘Greenback’.
Canadian Dollar (CAD) Uninspired despite Oil Prices Hitting Nine-Month High
Although oil prices rose to a nine-month high, the Canadian Dollar (CAD) saw muted movement on Wednesday due to a sluggish US Dollar.
If oil prices continue to climb, the crude-linked ‘Loonie’ could follow suit during today’s session.
Australian Dollar (AUD) Firms on Renewed RBA Hike Bets
The Australian Dollar (AUD) firmed overnight, as analysts mulled prospects of additional tightening from the Reserve Bank of Australia (RBA).
New Zealand Dollar (NZD) Supported by Cautiously Upbeat Market Mood
The risk-sensitive New Zealand Dollar (NZD) also found support in overnight trade, amid a cautiously optimistic market mood.