US Dollar drops amid Fed rate cut bets

Pound (GBP) whipsaws amid BoE rate cut bets

The Pound (GBP) initially fell yesterday, briefly touching multi-week lows against some peers, as markets moved to price in earlier rate cuts from the Bank of England (BoE).

This came as BoE Governor Andrew Bailey and colleagues testified in front of the Treasury Committee. However, Sterling bounced back after a Reuters poll showed that economists expect the BoE to start cutting rates later than markets anticipate.

Amid a lack of more impactful UK data today, the Confederation of British Industry’s (CBI) industrial trends orders figure could affect GBP. Another steep decline in industrial orders could pressure the Pound.

Euro (EUR) wavers in absence of data

The Euro (EUR) was mixed yesterday as a lack of Eurozone economic data left the currency exposed to market volatility.

The common currency was nevertheless underpinned thanks to its negative correlation with a weaker US Dollar (USD), which cushioned EUR exchange rates from steeper losses.

This afternoon, the Eurozone’s latest consumer confidence results are due out. Could an improvement in morale lend EUR support?

US Dollar (USD) tumbles amid Fed rate cut speculation

The US Dollar slumped to weekly lows on Tuesday amid a sharp decline in US Treasury bond yields.

This came as markets bet on a slightly more aggressive pace of policy loosening from the Federal Reserve this year, following recent comments from Fed officials.

The focus looking forward is on the Fed’s meeting minutes from its policy decision earlier this month. Could a hawkish consensus among policymakers see USD surge?

Canadian Dollar (CAD) plunges amid cooling inflation

The Canadian Dollar (CAD) plummeted yesterday after Canada’s latest consumer price index reported an unexpectedly sharp cooldown in inflation last month. This saw markets ramp up bets on a coming rate cut from the Bank of Canada (BoC).

Today, BoC Deputy Governor Toni Gravelle will deliver a speech. After yesterday’s inflation data, CAD may be particularly sensitive to any policy hints.

Australian Dollar (AUD) firms despite lack of data

The Australian Dollar (AUD) ticked higher overnight, despite a lack of impactful data and a tepid market mood.

New Zealand Dollar (NZD) rises in spite of thin trading conditions

The New Zealand Dollar (NZD) also gained ground overnight, although there was no clear catalyst for NZD’s strength.

Samuel Birnie

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