Pound (GBP) rallies on surprise inflation uptick
The pound (GBP) strengthened on Wednesday after the UK’s latest consumer price index reported an unexpected surge in inflation.
The sharper-than-expected rise boosted Sterling as it diminished market expectations for the Bank of England (BoE) to lower interest rates in December.
However, the pound could face headwinds today as the Confederation of British Industry (CBI) is forecast to report another decline in UK industrial orders this month.
Euro (EUR) weakens amid Russia-Ukraine fears
The euro (EUR) stumbled on Wednesday as escalating tensions between Russia and Ukraine unnerved European investors.
Additional downside pressure came from the European Central Bank’s (ECB) Financial Stability Review, which cautioned that economic growth in the Eurozone remains vulnerable.
Later today, the Eurozone’s latest consumer confidence index will be released. A persistently downbeat outlook could leave the euro on the back foot.
US dollar (USD) strengthens as investors seek safety
The US dollar (USD) rallied on Wednesday, supported by its safe-haven status as investors shied away from riskier assets.
The currency also found additional support as US Treasury yields climbed ahead of several speeches by Federal Reserve policymakers later in the session.
With little notable US data due for release today, the US dollar may remain at the mercy of market sentiment, with further gains likely if risk aversion persists.
Canadian dollar (CAD) rises as oil prices advance
The Canadian dollar (CAD) edged higher on Wednesday, benefiting from an uptick in global oil prices that boosted the commodity-tied currency.
This afternoon, Canada’s latest producer price index will be published. If October’s figures mirror the upside surprise in Tuesday’s CPI data, the ‘loonie’ could extend its gains.
Australian dollar (AUD) supported by RBA rate hike bets
The Australian dollar (AUD) climbed during overnight trade, bolstered by growing expectations that the Reserve Bank of Australia (RBA) may adopt a more hawkish approach to interest rates.
New Zealand dollar (NZD) softens on risk-off sentiment
Conversely, the New Zealand dollar (NZD) lost ground overnight as a cautious market mood continued to sap demand for the risk-sensitive ‘kiwi’.