Pound (GBP) uncertain following UK labour market data
A jump in UK unemployment and slowing wage growth put some pressure on the pound (GBP) yesterday. However, Sterling was still able to rise against its weaker peers.
Although the labour market report was worse than expected, it showed that earnings are outpacing inflation, with real wage growth hitting a two-and-a-half-year high.
This morning, the pound is enjoying support after the UK’s latest consumer price index beat forecasts. Inflation cooled less than expected last month, leading to a slight pullback in Bank of England (BoE) interest rate cut bets.
Euro (EUR) buoyed by improving German economic sentiment
The euro (EUR) enjoyed some support yesterday after Germany’s latest economic sentiment index beat forecasts to rise to its highest level in more than two years.
With optimism in the Eurozone’s largest economy growing for the ninth consecutive month, and at a faster-than-expected pace, the common currency strengthened.
Looking ahead, the Eurozone’s finalised CPI figures are due out this morning. Confirmation of cooling inflation in the bloc could weigh on the euro by fuelling European Central Bank (ECB) rate cut bets.
US dollar (USD) holds near five-month high amid anxious mood
The US dollar (USD) was rangebound yesterday, holding near a five-month high, as an anxious market mood kept the safe-haven currency afloat.
However, the ‘greenback’ was unable to make further gains. Even hawkish remarks from Federal Reserve Chair Jerome Powell failed to push the ‘greenback’ to new highs.
US economic data is in short supply today, which could leave the US dollar to be driven by market sentiment. USD exchange rates could remain supported if the mood sours.
Canadian dollar (CAD) slips amid BoC rate cut bets
The Canadian dollar (CAD) dropped yesterday in the wake of Canada’s latest CPI. Core inflation cooled to 2%, the Bank of Canada’s (BoC) inflation target, prompting bets on a coming rate cut.
Turning to today, Canadian economic data is thin on the ground. As a result, oil price dynamics could drive the crude-linked ‘loonie’.
Australian dollar (AUD) buoyed by rising commodity prices
The Australian dollar (AUD) edged higher overnight as the market mood stabilised and commodity prices began to tick higher once again.
New Zealand dollar (NZD) rises despite cooling inflation
The New Zealand dollar (NZD) firmed last night, despite New Zealand inflation cooling more than expected. Although price pressures eased faster than anticipated, the annual inflation rate of 4% remains well above the Reserve Bank of New Zealand’s (RBNZ) target.