Pound (GBP) fluctuates amid market volatility
A lack of UK economic data left the pound (GBP) exposed to market volatility yesterday, with Sterling trading in a wide range against its peers.
A souring market mood saw the increasingly risk-sensitive UK currency fall against its safer rivals but gain ground elsewhere.
Later this evening, a speech from Bank of England (BoE) policymaker Megan Greene could impact GBP. Hawkish remarks could lend Sterling support.
Euro (EUR) mixed as market mood shifts
The euro (EUR) also failed to find a clear direction yesterday as a shifting market mood saw the safer currency trade in a wide range.
EUR was able to rally against its riskier peers as sentiment soured in the afternoon.
Looking ahead, the European Central Bank’s (ECB) policy announcement this afternoon is in focus. If the bank hints at looser policy from June, the euro could stumble. Meanwhile, a surprise rate cut would likely see the currency collapse.
US dollar (USD) rallies following hot inflation figures
The US dollar (USD) surged yesterday after America’s latest consumer price index beat forecasts.
Both headline and core inflation came in hotter than expected, with the former jumping from 3.2% to 3.5% and the latter holding steady at 3.8%. This saw markets scale back Federal Reserve rate cut bets, thereby catapulting USD higher.
Turning to today’s session, the latest US producer price inflation figures could impact USD. Could another higher-than-forecast result see the ‘greenback’ strengthen further?
Canadian dollar (CAD) climbs in tandem with USD
The Canadian dollar (CAD) strengthened yesterday as CAD was boosted by its positive correlation with the US dollar. The US inflation release overshadowed the Bank of Canada’s (BoC) interest rate decision, where the bank left interest rates on hold.
Events on the calendar for CAD thin out today, which could leave the crude-linked ‘loonie’ to be driven by oil prices.
Australian dollar (AUD) claws back losses amid high inflation expectations
After plunging in the wake of the US CPI yesterday, the Australian dollar (AUD) managed to regain some ground overnight. A higher-than-forecast consumer inflation expectation result lifted AUD.
New Zealand dollar (NZD) languishes after yesterday’s slump
The New Zealand dollar (NZD) licked its wounds overnight, trading in a narrow range after yesterday’s sharp selloff.