Pound (GBP) supported by hawkish BoE rate cut
The pound (GBP) trended broadly higher on Thursday, following the Bank of England’s (BoE) latest interest rate decision.
While the BoE delivered its second rate cut of the year, this had already been priced in by markets, with Sterling sentiment strengthening amid some hawkish forward guidance from the bank.
BoE Chief Economist Huw Pill is scheduled to speak later today. His comments may reinforce the upside in GBP exchange rates if he also strikes a hawkish note.
Euro (EUR) boosted by USD weakness
The euro (EUR) appreciated yesterday, with the single currency benefitting from its strong negative correlation with the US dollar (USD).
However, these gains were kept in check by some mixed EUR data. While Eurozone retail sales beat expectations, markets were spooked by a larger-than-expected contraction in German industrial production.
With EUR data in short supply, the euro may struggle to find any strong directional bias through today’s session.
US dollar (USD) knocked by post-Trump profit-taking
The US dollar was subdued through the bulk of Thursday’s trading session as the currency was undermined by some profit-taking after storming to multi-month highs in the wake of Donald Trump’s election victory.
USD exchange rates subsequently stabilised toward the end of yesterday’s session as the Federal Reserve also cut interest rates but was reluctant to discuss the possibility of further cuts in December.
Coming up, the University of Michigan will publish its latest consumer sentiment index this afternoon. Will an improvement in household morale this month help the US dollar recoup Thursday’s losses?
Canadian dollar (CAD) muted as oil prices soften
The Canadian dollar (CAD) struggled to attract support through yesterday’s session as a slide in oil prices reflected negatively on the commodity-linked currency.
Canada will publish its latest jobs report later this afternoon. If October’s figures report an uptick in unemployment, the ‘loonie’ may close the week on a sour note.
Australian dollar (AUD) falters amid trade war fears
The Australian dollar (AUD) ticked lower overnight on Thursday amid concerns that Donald Trump’s tariffs on China could trigger another trade war between the world’s two largest economies.
New Zealand dollar (NZD) dented by risk-off flows
The New Zealand dollar (NZD) also weakened in overnight trade as trade war fears sapped market risk appetite.