Pound (GBP) subdued as inflation spike fails to shift BoE outlook
The pound (GBP) struggled for direction yesterday, despite the UK’s latest consumer price index revealing inflation accelerated to 3% in January.
Sterling remained under pressure as the stronger-than-expected inflation data failed to alter expectations that the Bank of England (BoE) will continue cutting interest rates in May.
Looking ahead, the Confederation of British Industry (CBI) will release its latest industrial trends orders index today. A further decline in order growth could weigh on the pound.
Euro (EUR) dips amid geopolitical uncertainty
The euro (EUR) weakened on Wednesday as concerns over the progress of Ukrainian peace talks unsettled markets.
This came after comments from US President Donald Trump seemingly attributing blame to Ukraine for the war with Russia, prompting a strong rebuke from Ukrainian President Volodymyr Zelenskyy.
At the start of today’s session, the euro slipped further after Germany’s latest producer price index showed factory gate prices fell more than expected, dampening inflation expectations in the Eurozone.
US dollar (USD) climbs on safe-haven demand
The US dollar (USD) strengthened yesterday as risk-off flows drove investors toward the safe-haven currency.
These gains were further reinforced by the minutes from the Federal Reserve’s most recent policy meeting, which reiterated the US central bank’s cautious approach to rate cuts.
Looking ahead, the US dollar could face some downside pressure today if last week’s initial jobless claims data prints higher as forecast.
Canadian dollar (CAD) lifted by oil price gains
The Canadian dollar (CAD) edged higher on Wednesday, benefiting from a rebound in oil prices, which bolstered the commodity-linked currency.
With no notable Canadian data due for release today, the ‘loonie’ is likely to remain sensitive to fluctuations in crude oil prices.
Australian dollar (AUD) gains on hopes of US-China trade progress
The Australian dollar (AUD) advanced overnight on Wednesday after US President Donald Trump hinted at the possibility of a trade deal with China.
New Zealand dollar (NZD) strengthens as market mood improves
The New Zealand dollar (NZD) also appreciated in overnight trade, with the prospect of easing US-China trade tensions helping to boost risk sentiment.
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