US Dollar (USD) Crumbles after Fed Decision
The US Dollar (USD) plummeted yesterday evening after Federal Reserve Chair Jerome Powell struck an unexpectedly dovish tone following the central bank’s rate decision.
Powell said the Fed is ‘very focused on not making the mistake of keeping rates too high too long’, prompting renewed bets on a rate cut in March.
Looking forward, another expected decline in American retail sales growth could weigh on the ‘Greenback’ this afternoon.
Pound (GBP) Slides as UK Economy Contracts
The Pound (GBP) fell sharply at the start of yesterday’s session after new data showed an unexpected contraction in the UK economy.
UK GDP shrank 0.3% in October, rather than stalling as expected, raising fresh concerns about the country’s economic outlook.
In the spotlight today is the Bank of England’s (BoE) final interest rate decision of 2023. If policymakers push back on rate cut expectations, Sterling could gain ground.
Euro (EUR) Softens as Eurozone Production Declines
The Euro (EUR) stumbled against its stronger peers yesterday, while avoiding losses elsewhere, following a larger-than-forecast decline in Eurozone industrial production.
Production in the bloc fell 0.7% in October, versus an anticipated drop of 0.3%, adding to growing evidence that the Eurozone economy is struggling.
Today, the European Central Bank (ECB) also announces its latest interest rate decision. Could a dovish tone in the accompanying press conference see EUR exchange rates slide?
Canadian Dollar (CAD) Lifted by Rising Oil Prices
The Canadian Dollar (CAD) firmed over the course of yesterday’s trade as a modest recovery in oil prices lifted the commodity-sensitive ‘Loonie’.
Turning to today, a lack of Canadian economic data may leave CAD exchange rates to be driven by crude prices once again.
Australian Dollar (AUD) Surges amid Risk-On Rally
The risk-sensitive Australian Dollar (AUD) rallied last night as a cheery market mood helped the currency shrug off a larger-than-forecast rise in Australian unemployment.
New Zealand Dollar (NZD) Climbs amid Upbeat Mood
The New Zealand Dollar (NZD) also soared overnight as upbeat investors flocked to the risk-sensitive ‘Kiwi’ in the wake of the Fed decision, although these gains were tempered somewhat by a weak GDP reading.