Euro falls following dovish ECB comments

Pound (GBP) subdued amid lack of data

The Pound (GBP) struggled during yesterday’s session as a lack of UK economic data left the currency exposed to losses.

Additionally, a new analysis from Goldman Sachs may have dampened Sterling sentiment, as the US bank said the UK is suffering ‘a significant long-run output cost of Brexit’.

This morning, a stronger-than-forecast UK jobs report has sparked a rally in the Pound. Wage growth slowed less than expected in the three months to December, while the unemployment rate surprised forecasters by dropping from 3.9% to 3.8%.

Euro (EUR) slips following dovish ECB remarks

The Euro (EUR) faced selling pressure on Monday in the wake of dovish comments from European Central Bank (ECB) policymaker Fabio Panetta.

Panetta said that the time for interest rate cuts is ‘fast approaching’, thereby fuelling expectations that the ECB will soon pivot its monetary policy stance.

EUR may be able to claw back some losses later this morning. Germany’s latest ZEW economic sentiment index is forecast to have improved for the seventh consecutive month.

US Dollar (USD) quiet ahead of US inflation data

The US Dollar (USD) was muted on Monday as USD investors were reluctant to alter their positions ahead of the upcoming US inflation data.

However, USD did manage to firm against some of its weaker rivals in the wake of recent hawkish comments from Federal Reserve officials.

Turning to the session ahead, the latest US consumer price index is due this afternoon. Will an expected cooldown in inflation see the ‘Greenback’ slump?

Canadian Dollar (CAD) fluctuates alongside oil prices

The crude-linked Canadian Dollar (CAD) wavered yesterday as choppy oil prices impacted the currency.

With Canadian data in short supply today, crude prices could continue to drive CAD exchange rates.

Australian Dollar (AUD) ticks lower amid cautious trade

The Australian Dollar (AUD) softened overnight, despite upbeat Australian data, as a cautious mood pressured the risk-sensitive currency.

New Zealand Dollar (NZD) slides as business inflation expectations decline

The New Zealand Dollar (NZD) fell sharply last night as a larger-than-forecast decline in New Zealand business inflation expectations dented the ‘Kiwi’.

Samuel Birnie

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