Pound (GBP) pressured by falling UK inflation
The Pound (GBP) faced pressure yesterday after UK inflation cooled more than forecast, prompting bets on a more aggressive pace of policy loosening from the Bank of England (BoE).
However, Sterling showed surprising resilience, with the British currency managing to hold its ground against some of its weaker peers.
Today, all eyes are on the BoE’s interest rate decision. The bank is expected to leave rates unchanged, but any hints that a rate cut is on the horizon could see GBP slump.
Euro (EUR) stumbles amid ECB rate cut bets
The Euro (EUR) weakened on Wednesday amid growing speculation around a string of rate cuts from the European Central Bank (ECB) this year.
A larger-than-forecast decline in German producer price inflation fuelled rate cut bets, along with a speech from ECB President Christine Lagarde in which she strongly signalled that the bank would soon start unwinding its restrictive policy.
Turning to today, EUR could recoup some losses if the latest PMI surveys show an improvement in Eurozone business activity.
US Dollar (USD) slumps on dovish Fed comments
The US Dollar (USD) plummeted yesterday evening in the wake of the Federal Reserve’s latest interest rate decision.
While the bank left rates unchanged, as expected, Fed Chair Jerome Powell suggested that a strong US labour market would not necessarily stop the central bank lowering interest rates.
Looking ahead, an expected uptick in US jobless claims could further pressure the ‘Greenback’ later today.
Canadian Dollar (CAD) steady despite weaker oil
The crude-linked Canadian Dollar (CAD) managed to rise against its weaker rivals on Wednesday, despite a decline in oil prices.
This afternoon, Bank of Canada (BoC) Deputy Governor Toni Gravelle is due to deliver a speech. Any dovish comments could dent CAD.
Australian Dollar (AUD) soars as jobs data smashes forecasts
The Australian Dollar (AUD) surged last night following startlingly strong jobs data. Unemployment in Australia fell from 4.1% to 3.7%, far lower than the forecast 4%. In addition, the country’s services PMI beat expectations to show an acceleration in activity.
New Zealand Dollar (NZD) undermined by GDP contraction
The New Zealand Dollar (NZD) briefly touched fresh multi-month lows last night after new data showed that the New Zealand economy unexpectedly slipped into a recession at the end of last year. However, a risk-on mood in the wake of the Fed’s dovish decision helped the ‘Kiwi’ eventually climb slightly higher.