Pound (GBP) slumps as UK inflation cools and growth forecast cut
The pound (GBP) faced notable selling pressure on Wednesday, initially falling after weaker-than-expected inflation data reinforced expectations for a Bank of England (BoE) rate cut in May.
Sterling then extended its losses following UK Chancellor Rachel Reeves’ Spring Statement, in which she outlined public spending cuts and confirmed the UK’s 2025 growth forecast had been halved.
Looking ahead, BoE policymaker Dr. Swati Dhingra is due to speak today. As one of the central bank’s most dovish members, any comments supporting a May rate cut could add to the pound’s woes.
Euro (EUR) directionless amid lull in data
The euro (EUR) struggled for clear momentum on Wednesday as a lack of notable Eurozone data releases left the currency adrift.
Although the single currency found some support from its negative correlation with the US dollar (USD), lingering concerns about a potential EU-US trade conflict capped any gains.
With no major EUR data due today, the euro may remain listless in the coming session.
US dollar (USD) volatile amid Trump tariff shock
The US dollar fluctuated through Wednesday’s session, initially softening amid a risk-on market mood before demand for the ‘greenback’ was reignited following US President Donald Trump’s new car tariff announcement.
However, the USD’s rebound proved short-lived as markets assessed the potential impact of the tariffs, and they stoked recession fears.
Today’s focus will be on the finalised US GDP figures for Q4 2024. If growth is confirmed to have slowed to its weakest pace since early 2024, the US dollar could struggle to find support.
Canadian dollar (CAD) lifted by rising oil prices
The Canadian dollar (CAD) gained ground on Wednesday as an uptick in oil prices boosted the appeal of the commodity-linked currency.
With no major Canadian data scheduled for release today, oil price fluctuations will likely continue to drive ‘loonie’ movement.
Australian dollar (AUD) climbs as US dollar weakens
The Australian dollar (AUD) advanced overnight as a softer US dollar made the risk-sensitive ‘Aussie’ more appealing to investors.
New Zealand dollar (NZD) strengthens despite trade worries
The New Zealand dollar (NZD) also firmed in overnight trade, as broad US dollar weakness helped offset market concerns over Trump’s latest tariff threats.
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