Pound (GBP) muted after Reeves’s growth announcement
The pound (GBP) remained largely flat on Tuesday following a key speech from UK Chancellor Rachel Reeves, in which she detailed plans to boost the country’s economic growth.
Investor reactions appeared mixed, with many doubting that her outlined proposals would be sufficient to achieve the government’s ambitious growth targets.
In the absence of any key UK data releases, the pound could struggle to find a clear direction today.
Euro (EUR) subdued ahead of anticipated ECB rate cut
The euro (EUR) saw limited movement on Tuesday as investors braced for the European Central Bank’s (ECB) upcoming policy announcement later today.
Markets widely anticipate an interest rate cut, which is likely to weaken the single currency. However, the extent of its decline may hinge on the tone of the ECB’s forward guidance.
Before the decision, the euro could also be influenced by the release of the Eurozone’s latest GDP figures. If data confirms a slowdown in economic growth, the euro may face additional selling pressure.
US dollar (USD) stable following Fed rate decision
The US dollar (USD) started Wednesday on a cautious note as markets awaited the Federal Reserve’s latest policy announcement.
However, the currency rebounded later in the day as the Fed opted to hold interest rates steady while delivering a hawkish outlook for future policy.
Looking ahead, fourth-quarter GDP data from the US is due today. A robust economic expansion at the end of 2024 could bolster the ‘greenback’.
Canadian dollar (CAD) steady despite BoC easing
The Canadian dollar (CAD) remained stable on Wednesday, shrugging off a widely expected interest rate cut by the Bank of Canada (BoC).
With little domestic data on the docket, the ‘loonie’ is likely to remain sensitive to oil price movements. A continued decline in prices may exert some pressure on CAD exchange rates.
Australian dollar (AUD) weakens on rising RBA rate cut bets
The Australian dollar (AUD) drifted lower during Wednesday’s overnight session, pressured by mounting speculation that the Reserve Bank of Australia (RBA) could lower interest rates next month.
New Zealand dollar (NZD) pressured by sharp drop in business confidence
The New Zealand dollar (NZD) also weakened in overnight trade as a significant deterioration in domestic business confidence undermined the ‘kiwi’.