Pound (GBP) stumbles as UK growth stagnates
The pound (GBP) faced resistance on Wednesday, as GBP investors were left disappointed by the latest UK GDP figures.
July’s data reported UK economic growth stalled rather than expanding 0.2% as forecast, with Sterling slipping as this also stoked bets the Bank of England (BoE) will cut interest rates in November.
Looking ahead, in the absence of any notable UK economic data, the pound may be left directionless through today’s session.
Euro (EUR) dented by USD strength
The euro (EUR) ticked lower during yesterday’s session as the single currency was undermined by its negative correlation with the US dollar (USD).
EUR investors were also reluctant to make any aggressive bets ahead of the European Central Bank’s (ECB) impending interest rate decision.
All eyes will unsurprisingly be on the ECB’s rate decision today. While a 25bps rate cut is widely priced in, ECB President Christine Lagarde’s press conference could undermine the euro if she hints at more cuts to come.
US dollar (USD) strengthens as investors trim Fed rate cut bets
The US dollar firmed on Wednesday, following the publication of the latest US consumer price index.
While the CPI figures reported headline inflation slowed at a faster-than-expected pace in August, they also reported a surprise uptick in month-on-month core inflation, which slashed the odds of a larger Federal Reserve interest rate cut next week.
Coming up, the US dollar may maintain a positive trajectory, if the latest US producer price index also points to an acceleration of underlying price growth.
Canadian dollar (CAD) supported by rebound in oil prices
The Canadian dollar (CAD) trended higher through yesterday’s session, with the commodity-linked currency drawing support from a rebound in oil prices.
Coming up, movement in the ‘loonie’ is likely to remain tied to oil price dynamics today. Will a further appreciation of the crude market help to lift CAD exchange rates?
Australian dollar (AUD) rallies amid risk-on mood
The Australian dollar (AUD) strengthened overnight on Wednesday as a sharp rebound across the US stock market helped to cheer investor sentiment.
New Zealand dollar (NZD) buoyed by positive risk appetite
The New Zealand dollar (NZD) also firmed in overnight trade as the positive shift in risk sentiment helped to underpin the ‘kiwi’.