Pound (GBP) slips amid BoE rate cut bets
The Pound (GBP) softened yesterday following comments from former Bank of England (BoE) Chief Economist Andy Haldane.
Haldane, who warned of stubborn inflation risks when he left the BoE in 2021, said that the bank should cut interest rates soon or risk deepening the UK’s recession. Economic worries and rate cut bets both subsequently weighed on Sterling.
Turning to today, BoE Governor Andrew Bailey and three of his colleagues are due to give evidence to parliament’s Treasury Committee. Could signals of a coming rate cut see the Pound fall further?
Euro (EUR) subdued by German recession worries
The Euro (EUR) edged lower on Monday amid fresh concerns about Germany, the Eurozone’s largest economy.
The Bundesbank – Germany’s central bank – said that the country will likely fall into a technical recession in the first quarter of 2024. It also warned that there was ‘no recovery in the German economy yet’.
Looking forward, the single currency may see muted movement today amid a lack of Eurozone economic data.
US Dollar (USD) inches higher amid cautious trade
Despite thin trading conditions yesterday, the safe-haven US Dollar (USD) was able to drift slightly higher against many of its rivals.
A cautious market mood helped to lift the ‘Greenback’, as did dwindling Federal Reserve rate cut bets following last week’s hotter inflation data.
American data remains in short supply today, which could leave USD to trade on risk appetite once again.
Canadian Dollar (CAD) concedes oil-inspired gains
The crude-linked Canadian Dollar (CAD) enjoyed initial success on Monday amid an uptick in oil prices. However, a decline in Canadian producer price inflation saw the ‘Loonie’ reverse course later in the day.
This afternoon, CAD investors will focus on Canada’s latest consumer price index. If a cooldown in inflation fuels Bank of Canada (BoC) rate cut bets, the Canadian Dollar could fall.
Australian Dollar (AUD) rangebound following RBA minutes
The Australian Dollar (AUD) moved sideways overnight in the wake of the Reserve Bank of Australia’s (RBA) monetary policy meeting minutes. The minutes revealed that the RBA considered hiking earlier this month, but also showed some caution among policymakers.
New Zealand Dollar (NZD) muted as risk appetite thins
The New Zealand Dollar (NZD) softened slightly last night amid a cautious market mood and a lack of New Zealand data.