Euro (EUR) Falls as German Inflation Slows
The Euro (EUR) weakened yesterday after Germany’s consumer price index revealed that inflation cooled more than expected this month.
With prices pressures easing in the Eurozone’s largest economy, investors began betting on interest rate cuts from the European Central Bank (ECB). This dragged on the common currency.
Turing to today, the CPI for the wider Eurozone is due out this morning. If it shows that inflation in the bloc continued to cool in November, EUR could face fresh selling pressure.
Pound (GBP) Underpinned by BoE Expectations
Although a lack of UK economic data left the Pound (GBP) exposed to volatility yesterday, Sterling was able to find some success.
Recent hawkish comments from Bank of England (BoE) officials continued to underpin the Pound. This saw GBP edge higher against its weaker rivals.
Looking forward, UK economic data remains in short supply today, potentially leaving Sterling exposed to further volatility.
US Dollar (USD) Ticks Higher as GDP Beats Forecasts
The US Dollar (USD) crawled up from multi-month lows yesterday as investors bought the dip.
Stronger-than-forecast US GDP also aided USD, as it saw markets delay their bets for Federal Reserve rate cuts. However, a risk-on mood capped the safe-haven currency’s gains.
This afternoon, the Fed’s preferred measure of inflation is scheduled for release. If the core PCE price index cools as expected, USD exchange rates could tumble.
Canadian Dollar (CAD) Wavers as Oil Prices Fluctuate
The crude-linked Canadian Dollar (CAD) faced fresh volatility yesterday as oil prices traded in a wide range.
Later on, we could see the ‘Loonie’ lose ground as Canada’s third-quarter GDP results are expected to show that the economy stagnated. However, OPEC+ is expected to announce oil output cuts, which could send both crude prices and CAD exchange rates higher.
Australian Dollar (AUD) Rises as Commodities Tick Higher
The Australian Dollar (AUD) strengthened overnight, despite a mixed market mood and lack of impactful Australian data. Rising commodity prices may have boosted AUD.
New Zealand Dollar (NZD) Buoyed by Business Confidence
The New Zealand Dollar (NZD) also climbed last night as an unexpected improvement in New Zealand business confidence lifted the ‘Kiwi’.