Pound (GBP) muted in quiet trade
The pound (GBP) remained directionless on Wednesday, as a dearth of UK economic data left investors with little impetus to drive movement.
Lingering concerns over the UK’s recent sluggish economic performance also dampened GBP sentiment.
With no notable UK data scheduled for release today, the pound is likely to trade without a clear trajectory.
Euro (EUR) subdued ahead of key ECB meeting
The euro (EUR) traded flat on Wednesday as investors held back ahead of the European Central Bank’s (ECB) final interest rate decision of the year.
Markets widely expect the ECB to announce a rate cut this afternoon, but uncertainty over its forward guidance has left EUR investors cautious.
All eyes will be on the ECB’s decision later today. If policymakers signal additional rate cuts in the future, the euro could face fresh selling pressure.
US dollar (USD) climbs on stronger inflation reading
The US dollar (USD) trended broadly higher yesterday after the latest US consumer price index showed inflation picking up to a four-month high in November.
This prompted some USD investors to scale back expectations for Federal Reserve rate cuts in early 2025.
Later today, the release of the US producer price index could provide additional support for the ‘greenback’ if factory-gate prices suggest further inflationary pressures.
Canadian dollar (CAD) rises despite BoC rate cut
The Canadian dollar (CAD) strengthened on Wednesday, despite the Bank of Canada (BoC) implementing a widely anticipated 50bps rate cut.
The ‘loonie’ firmed the BoC softened its tone on future rate cuts, stating these may not be necessary if the economy evolves as expected.
CAD may extend its gains today, provided oil prices maintain their upward trajectory.
Australian dollar (AUD) lifts on strong jobs report
The Australian dollar (AUD) surged overnight after a robust domestic employment report reduced expectations for further interest rate cuts from the Reserve Bank of Australia (RBA).
New Zealand dollar (NZD) benefits from risk-on sentiment
The New Zealand dollar (NZD) gained ground in overnight trade, supported by improved risk appetite and the positive momentum of its Australian counterpart.
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