Pound (GBP) drops as UK inflation misses forecasts
The Pound (GBP) fell sharply at the start of yesterday’s session, relinquishing Tuesday’s gains, after the UK’s latest consumer price index missed forecasts.
Rather than rising, British inflation held steady last month. As a result, markets increased their bets on a Bank of England (BoE) interest rate cut as early as May.
This morning, the UK’s latest GDP data missed forecasts to confirm that the country fell into a recession at the end of last year. This could see GBP struggle through today’s session.
Euro (EUR) softens despite upbeat data
The Euro (EUR) stumbled against its stronger peers on Wednesday, despite an unexpected jump in Eurozone industrial production in December.
The downside came amid an upbeat market mood, which sapped demand for the safer single currency.
EUR exchange rates are muted this morning in the wake of cautious comments from European Central Bank (ECB) President Christine Lagarde, who said the bank will remain data-dependant when it comes to monetary policy.
US Dollar (USD) weakens amid risk-positive trade
The US Dollar (USD) ticked lower yesterday, trimming some of the gains it enjoyed in the wake of Tuesday’s inflation data, as a risk-on mood weighed on the safe-haven currency.
In addition, a slight decline in US Treasury yields also pressured USD exchange rates.
Looking forward, the latest US retail sales data could dent the US Dollar today. Forecasters expect domestic sales growth to have contracted last month.
Canadian Dollar (CAD) sheds gains as oil prices sour
The crude-linked Canadian Dollar (CAD) traded in tandem with oil prices on Wednesday, initially climbing before slumping in the afternoon.
Turning to today, Canadian economic data is thin on the ground. This could see the ‘Loonie’ trade on oil price dynamics once again.
Australian Dollar (AUD) slips following jobs report
The Australian Dollar (AUD) initially fell overnight following weaker-than-expected Australian jobs data. However, a risk-on mood helped the ‘Aussie’ recoup some of its losses.
New Zealand Dollar (NZD) rangebound amid lack of data
The New Zealand Dollar (NZD) traded sideways last night as thin trading conditions muted the ‘Kiwi’.