Pound (GBP) edges higher after UK inflation report
The pound (GBP) gained ground yesterday after the UK’s August consumer price index revealed that headline inflation held steady at 3.8%, in line with forecasts.
With CPI running at nearly twice the Bank of England’s (BoE) 2% goal, the data strengthened expectations that the BoE will keep rates unchanged today and could hint that additional cuts are unlikely in 2025.
If policymakers adopt a hawkish stance in their policy statement today, Sterling may receive another lift this afternoon.
Euro (EUR) softens on profit-taking
The euro (EUR) slipped during yesterday’s session as traders banked their profits after the currency’s sharp rise earlier in the week.
A small downward revision to the Eurozone’s final August inflation reading added to the downside pressure. However, EUR clawed back some of its losses later in the day as the US dollar (USD) softened.
With little Eurozone data due today, EUR could take its cues from USD price action, particularly in the wake of the Federal Reserve’s policy decision.
US dollar (USD) strengthens following Fed meeting
After losing ground ahead of the Federal Reserve’s announcement, the US dollar rebounded once the decision was released.
Newly appointed policymaker Stephen Miran was the sole voice calling for a larger 50bps cut, while Fed Chair Jerome Powell cautioned about lingering inflationary risks.
Later today, the release of the latest US jobless claims may sway USD sentiment. Evidence of ongoing labour market fragility could weigh on the ‘greenback’.
Canadian dollar (CAD) pressured by BoC cut
The Canadian dollar (CAD) fell yesterday after the Bank of Canada (BoC) lowered interest rates by 25bps. CAD later recovered some ground as USD rebounded, given its close correlation with the American currency.
The ‘loonie’ could face renewed headwinds today as markets digest the BoC move, while fluctuations in oil prices may also shape its trajectory.
Australian dollar (AUD) sinks on weak labour data
The Australian dollar (AUD) tumbled overnight, knocked by risk-off sentiment and a disappointing domestic jobs report.
New Zealand dollar (NZD) tumbles after GDP miss
The New Zealand dollar (NZD) also came under heavy selling pressure overnight as GDP figures revealed a 0.9% contraction in the second quarter – far worse than the 0.3% decline forecast.
Never miss a movement. Create a free account with TorFX to get the latest currency news delivered straight to your inbox. You can also set up rate alerts and check live rates 24/7.