Euro (EUR) Slides as ECB Pauses Hiking Cycle
The Euro (EUR) weakened yesterday as the European Central Bank (ECB) paused its interest rate hiking cycle after 15 months of policy tightening.
While markets expected the move, it still weighed on EUR exchange rates. ECB President Christine Lagarde also said that the Eurozone economy is likely to ‘remain weak’, fuelling speculation that interest rates have peaked.
Looking ahead, a lack of economic releases from the Eurozone today could limit the Euro’s movement. The common currency’s negative correlation with the US Dollar (USD) could exert the most influence over EUR exchange rates.
Pound (GBP) Pressured by Downbeat Sales Data
The Pound (GBP) initially struggled yesterday after the Confederation of British Industry’s (CBI) latest distributive trades survey showed a worrying decline in retail trade.
Sterling was able to recoup some losses later in the session against some of its weaker peers, thanks to an improving market mood.
With UK data thin on the ground today, GBP may end the week without a clear directional bias.
US Dollar (USD) Subdued despite Strong GDP
The US Dollar was mixed during yesterday’s session, retreating against its stronger peers despite a startling acceleration in US GDP in the third quarter.
Rather than boosting Federal Reserve rate hike bets, the GDP data cheered markets amid hopes of a ‘soft landing’. The improving mood muted the safe-haven ‘Greenback’.
Today, USD investors will turn their attention to the latest core PCE price index – the Fed’s preferred measure of inflation. Could a cooldown dampen rate hike bets and see USD slip further?
Canadian Dollar (CAD) Slips as Oil Prices Fall
The Canadian Dollar (CAD) fell against many of its peers yesterday as declining oil prices dragged on the crude-linked ‘Loonie’.
Amid an ongoing absence of high-impact CAD data today, the Canadian Dollar may once again be driven by oil. An uptick in oil prices might help the ‘Loonie’ recover.
Australian Dollar (AUD) Firms after Hotter PPI
The Australian Dollar (AUD) ticked higher last night after producer price inflation beat forecasts, boosting bets on another Reserve Bank of Australia (RBA) rate hike.
New Zealand Dollar (NZD) Stumbles without Clear Catalyst
The New Zealand Dollar (NZD) softened in overnight trade, with the ‘Kiwi’ faltering despite stronger consumer confidence figures and a risk-on market mood.