Pound plunges as BoE policymaker forecasts sharp fall in inflation

Pound (GBP) slumps amid BoE rate cut bets

The pound (GBP) slumped at the end of last week after some dovish comments from Bank of England (BoE) Deputy Governor Dave Ramsden.

Speaking in Washington DC, Ramsden said that he is confident UK inflation will fall sharply in April, close to the bank’s 2% target. This fuelled BoE interest rate cut bets, thereby undermining Sterling.

Amid a lack of more impactful data today, GBP investors may turn to the latest releases from the Confederation of British Industry (CBI). Could signs of improving business optimism lend Sterling support?

Euro (EUR) buoyed by signs of sticky German inflation

The euro (EUR) trended broadly higher on Friday as Germany’s latest producer price index printed higher than forecast.

With wholesale inflation unexpectedly ticking up in the Eurozone’s largest economy last month, investors modestly adjusted their bets on the pace of the European Central Bank’s (ECB) rate-cutting cycle.

Later this afternoon, ECB President Christine Lagarde is due to speak. If she once again signals that the bank is likely to cut rates in June, the single currency could stumble.

US dollar (USD) softens as market mood improves

The US dollar (USD) trended slightly lower during Friday’s session as the safe-haven currency struggled to attract support amid a cautiously upbeat market mood.

Investors seemed hopeful that the recent tensions between Israel and Iran were beginning to cool off, after the two countries launched drone strikes at one another earlier in the week.

Today, an ongoing lack of US economic data could leave the ‘greenback’ to trade on risk appetite once again. Could a cheery mood weigh on the US dollar?

Canadian dollar (CAD) choppy as oil prices waver

The crude-linked Canadian dollar (CAD) fluctuated on Friday as the fast-changing situation in the Middle East led to volatile oil prices.

Looking ahead, an acceleration in Canadian producer price inflation in March could lend CAD support this afternoon. Until then, the ‘loonie’ could struggle if oil prices continue to soften.

Australian dollar (AUD) rises as risk appetite improves

The risk-sensitive Australian dollar (AUD) found modest success overnight amid a cautiously upbeat market mood.

New Zealand dollar (NZD) firms amid cheery trade

The New Zealand dollar (NZD) also gained ground last night as a return of risk appetite boosted demand for the ‘kiwi’.

Samuel Birnie

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