Pound (GBP) steady following BoE commentary
The pound (GBP) drifted sideways at the end of last week, as markets reacted to comments from Bank of England (BoE) Deputy Governor Dave Ramsden.
Ramsden highlighted inflation risks but also hinted that the BoE may need to accelerate its ‘gradual and careful’ approach to cutting interest rates at times.
Looking ahead, the pound could face headwinds today if the UK’s latest manufacturing PMI confirms a deepening contraction in the sector last month.
Euro (EUR) gains as German inflation remains stable
The euro (EUR) posted modest gains on Friday after the release of Germany’s latest consumer price index.
February’s preliminary CPI figures showed inflation holding steady at 2.3%, leading to a slight reduction in European Central Bank (ECB) rate cut expectations and supporting the euro.
The focus now turns to the Eurozone’s latest CPI reading. If inflation holds at 2.5% or exceeds forecasts, the euro may maintain its positive trajectory.
US dollar (USD) subdued as inflation slows
The US dollar (USD) struggled for direction at the end of last week as investors digested the latest US core PCE price index.
The Federal Reserve’s preferred inflation gauge cooled from 2.9% to 2.6% in January, fueling speculation over Fed rate cuts and limiting the US dollar’s Trump tariff-driven gains.
Later today, the US will publish its latest ISM manufacturing PMI. If US factory activity remains resilient, the US dollar could find fresh support.
Canadian dollar (CAD) lifted by strong GDP data
The Canadian dollar (CAD) firmed on Friday after Canada’s latest GDP report revealed stronger-than-expected economic growth in the final quarter of 2024.
With no key Canadian data scheduled at the start of the week, CAD movement may be dictated by oil price trends. A continued decline in crude prices could erase some of the ‘loonie’s’ recent gains.
Australian dollar (AUD) strengthens on upbeat Chinese PMI
The Australian dollar (AUD) edged higher in overnight trade, buoyed by better-than-expected PMI data from China.
New Zealand dollar (NZD) fluctuates amid shifting sentiment
The New Zealand dollar (NZD) struggled to hold its ground in overnight trade as mixed market sentiment provided only intermittent support for the risk-sensitive ‘kiwi’.
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