Pound (GBP) firms after services PMI beats forecasts
The Pound (GBP) found some success yesterday after the UK’s services PMI for January beat forecasts.
According to the preliminary results, service sector activity expanded more than expected this month, which boosted GBP.
Amid a lack of more impactful economic data today, the Confederation of British Industry’s (CBI) latest retail sales balance could affect Sterling. Will another negative reading put pressure on the Pound?
Euro (EUR) dented by downbeat PMIs
The Euro (EUR) initially slipped on Wednesday after the Eurozone’s January PMI results pointed to an ongoing contraction in business activity.
However, EUR was able to recoup some losses thanks to its strong negative correlation with a weaker US Dollar (USD).
Today, all eyes are on the European Central Bank’s (ECB) first interest rate decision of 2024. While the bank is likely to leave rates unchanged, the accompanying commentary could boost EUR if policymakers push back on rate cut speculation.
US Dollar (USD) tumbles amid risk-positive trade
The US Dollar slumped yesterday as a risk-on market mood sapped demand for the safe-haven ‘Greenback’.
Stronger-than-forecast PMI results cushioned USD later in the day. However, this was not enough to reverse the currency’s losses as markets remained upbeat.
Looking ahead, US GDP figures for the fourth quarter of 2023 could spark volatility later today. An expected slowdown could stoke bets on a coming rate cut from the Federal Reserve, which would likely drive USD lower.
Canadian Dollar (CAD) drops as BoC signals interest rate peak
The Canadian Dollar (CAD) fell sharply yesterday after the Bank of Canada (BoC) left its monetary policy untouched and signalled that interest rates have likely peaked.
Today, market-moving Canadian data is in short supply. As a result, oil prices could drive the crude-linked ‘Loonie’.
Australian Dollar (AUD) rangebound amid quiet market mood
The Australian Dollar (AUD) was flat overnight as global markets braced for the US GDP data due out this afternoon, keeping the risk-sensitive ‘Aussie’ in a narrow range.
New Zealand Dollar (NZD) muted amid thin trading conditions
Likewise, the New Zealand Dollar (NZD) traded sideways last night amid a tepid market mood and a lack of economic data.