Pound (GBP) slips after BoE decision
The pound (GBP) softened on Thursday in the wake of the Bank of England’s (BoE) latest policy call.
As expected, the BoE opted to keep rates unchanged, though Sterling came under pressure after Governor Andrew Bailey signalled the bank is not finished with its current rate-cutting cycle.
This morning, the pound remains on the back foot as an unexpected jump in UK government borrowing reignites fiscal worries, overshadowing stronger retail sales figures.
Euro (EUR) steady on ECB caution
The euro (EUR) held its ground yesterday as markets weighed remarks from European Central Bank Vice President Luis de Guindos.
Speaking in London, de Guindos warned that the ECB needs to take a ‘very cautious’ stance on monetary policy given the heightened uncertainty across the Eurozone.
With Eurozone data in short supply today, the single currency may struggle to find clear direction.
US dollar (USD) whipsaws after Fed cut
Trade in the US dollar (USD) was choppy on Thursday. The ‘greenback’ initially gave back much of the ground gained after the Federal Reserve’s policy decision on Wednesday, as investors stuck to expectations of two more cuts by year-end.
Later in the session, demand for USD firmed again after US jobless claims fell more sharply than forecast last week.
With little US data due today, the dollar’s movement may remain tied to shifting Fed rate cut expectations.
Canadian dollar (CAD) lifted by USD gains
The Canadian dollar (CAD) firmed on Thursday, supported by its strong correlation with a resurgent US dollar.
Looking ahead, Canada’s latest retail sales figures are due later today. Another decline in sales could see the ‘loonie’ surrender some of its recent strength.
Australian dollar (AUD) weakens on souring sentiment
The Australian dollar (AUD) edged lower in overnight trade as renewed US dollar strength dampened broader risk appetite.
New Zealand dollar (NZD) dragged lower by trade miss
The New Zealand dollar (NZD) also lost ground overnight after domestic data showed exports slumped last month, driving the trade deficit to its widest level in ten months.
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