Pound (GBP) softens as borrowing figures disappoint
The pound (GBP) faced downward pressure yesterday following the release of the UK’s latest public borrowing data.
Figures showed the government borrowed more than anticipated in December, exacerbating investor concerns over the rising cost of UK debt.
With no major UK economic releases scheduled today, the pound may struggle to establish a clear trajectory.
Euro (EUR) benefits from US dollar losses
The euro (EUR) ticked higher on Wednesday, supported by its inverse relationship with the US dollar (USD).
However, gains were capped as European Central Bank (ECB) policymaker Yannis Stournaras hinted that the ECB might need to expedite rate cuts if US tariffs are introduced against the Eurozone.
Later today, the Eurozone’s consumer confidence figures will be in focus. A weak reading could temper demand for the euro.
US dollar (USD) slides on tariff concerns
The US dollar weakened during Wednesday’s session as markets welcomed the news that Donald Trump had delayed introducing some of his more aggressive tariff proposals.
While tariffs on China, Mexico, and Canada are set to take effect in February, they are less severe than the comprehensive measures hinted at during Trump’s campaign.
USD investors will remain focused on the White House, looking for further clarity on Trump’s fiscal plans and trade policies.
Canadian dollar (CAD) weakens amid tariff fears
The Canadian dollar (CAD) struggled on Wednesday as Trump’s proposed 25% tariffs on Canadian goods stoked fears of economic disruption.
Attention now shifts to Canada’s retail sales figures due later today. If the data reports sales growth remained sluggish in December, the ‘loonie’ may face additional selling pressure.
Australian dollar (AUD) steady as tensions ease
The Australian dollar (AUD) traded in a narrow range overnight, buoyed by Trump’s less aggressive tariff plans and China’s measured response to the proposals.
New Zealand dollar (NZD) stable as trade concerns subside
The New Zealand dollar (NZD) was similarly unmoved in overnight trade, as optimism about a potential de-escalation in US-China tensions helped stabilise market sentiment.
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