US Dollar Extends Selloff despite Signs of Stubborn Price Pressures

US Dollar (USD) Continues to Weaken despite Stronger PPI

The US Dollar (USD) weakened yesterday as investors ignored a stronger-than-forecast PPI reading to instead focus on recent dovish remarks from Federal Reserve officials.

Last night’s Fed meeting minutes also failed to support the US Dollar, with policymakers focusing on how long rates should remain restrictive rather than how high they should go.

The US consumer price index is in the spotlight for USD investors today. If inflation cools as forecast, the ‘Greenback’ could face fresh selling pressure.

Pound (GBP) Wavers Higher amid Volatile Mood

The Pound (GBP) saw volatile trade yesterday, shrugging off an initial fall to then move higher against its peers, before trimming its gains in the afternoon.

The bumpy upside came amid wider turbulence in the currency markets, while an uptick in Bank of England (BoE) interest rate hike bets underpinned Sterling.

This morning, UK GDP showed a 0.2% expansion in August, as expected. However, July’s figure was revised down from -0.5% to -0.6%, so Sterling’s upside may be limited.

Euro (EUR) Rises as USD Declines

The Euro (EUR) firmed during yesterday’s session, with EUR enjoying its negative correlation with the declining US Dollar.

Dovish comments from European Central Bank (ECB) officials may have capped EUR’s upside, although the single currency was still able to gain ground against many of its rivals.

Looking forward, the minutes from the ECB’s policy meeting last month could drive EUR movement today. Will a generally dovish tone undermine the common currency?

Canadian Dollar (CAD) Dented by Dropping Oil Prices

The Canadian Dollar (CAD) slipped against its stronger peers on Wednesday as declining oil prices dampened demand for the crude-linked ‘Loonie’.

With Canadian economic data remaining thin on the ground today, oil price dynamics could continue to drive CAD exchange rates.

Australian Dollar (AUD) Wobbles amid Mixed Commodities

The Australian Dollar (AUD) fluctuated last night, as mixed movement in the commodities markets stifled AUD’s upside potential.

New Zealand Dollar (NZD) Dented by Political Uncertainty

The New Zealand Dollar (NZD) slipped last night, despite an upbeat mood, with the ‘Kiwi’ perhaps succumbing to political jitters ahead of New Zealand’s general election this weekend.

Samuel Birnie

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