Pound (GBP) jumps following hot UK inflation
The Pound (GBP) jumped yesterday as the UK’s latest consumer price index beat forecasts.
UK headline inflation unexpectedly accelerated in December. This saw markets scale back bets on interest rate cuts from the Bank of England (BoE).
Looking forward, UK economic data is in short supply today. As a result, Sterling could see mixed movement.
Euro (EUR) firms amid risk aversion
The Euro (EUR) rose against its weaker peers yesterday. Confirmation that Eurozone inflation accelerated last month and the prevailing risk-off market mood both supported EUR.
However, the single currency’s upside was limited due to its strong negative correlation with the US Dollar (USD).
Later today, the European Central Bank (ECB) will release the minutes from its December policy meeting. Could a hawkish tone from the bank boost the Euro?
US Dollar (USD) strikes five-week high as sales beat forecasts
The safe-haven US Dollar continued to march higher yesterday, hitting a five-week high, amid the increasingly anxious tone characterising trade.
US retail sales data also lent the ‘Greenback’ some support, as domestic sales growth rose more than forecast in December.
Risk appetite could continue to drive the US Dollar until this afternoon, when the latest initial jobless claims figure is due out. If new unemployment benefit claims remained low last week, USD could climb.
Canadian Dollar (CAD) dragged lower as oil falls
The crude-linked Canadian Dollar (CAD) fell against its stronger rivals yesterday amid a decline in oil prices.
Crude prices could continue to drive the ‘Loonie’ today. If oil continues to weaken, the Canadian Dollar may slide.
Australian Dollar (AUD) rangebound following mixed data
The Australian Dollar (AUD) was muted overnight following mixed economic data. While a decline in employment weighed on the ‘Aussie’, this was offset by higher-than-forecast consumer inflation expectations.
New Zealand Dollar (NZD) flat amid thin trading conditions
The New Zealand Dollar (NZD) also traded in a narrow range last night as a lack of notable data and muted market mood kept the ‘Kiwi’ subdued.