Pound (GBP) unsettled amid volatile market mood
The pound (GBP) saw erratic movement yesterday as the absence of UK data left Sterling at the mercy of broader market turbulence.
With investors on edge ahead of the Federal Reserve announcement and geopolitical tensions simmering, GBP swung sharply alongside other major currencies.
Another quiet day for British releases means the pound may continue to drift without a firm sense of direction.
Euro (EUR) unsteady despite softening USD
The euro (EUR) experienced stop-start trade yesterday, even after European Central Bank (ECB) President Christine Lagarde delivered upbeat remarks on growth and a weakening US dollar (USD) offered some external support.
Persistent unease surrounding the Russia-Ukraine conflict limited appetite for the single currency, contributing to its erratic performance against several rivals.
With no Eurozone data scheduled today, geopolitical developments may dictate EUR’s course, and lingering nerves could keep the currency on the back foot.
US dollar (USD) tumbles as Fed trims rates
The US dollar plunged last night after the Federal Reserve cut interest rates by 25 basis points, an outcome widely anticipated by markets. Fed Chair Jerome Powell offered cautious guidance, suggesting policymakers were ‘well positioned to wait’ before pursuing another reduction.
However, he also said the labour market may be weaker than anticipated, while also sounding optimistic that tariff-driven inflation pressures may be less persistent than feared. This encouraged traders to bolster expectations of additional cuts in the first half of 2026.
As markets continue to parse the decision, USD may remain unstable today. The latest initial jobless claims data could guide movement, with an expected rise in claims posing a potential downside risk for the ‘greenback’.
Canadian dollar (CAD) edges lower after BoC holds steady
The Canadian dollar (CAD) slipped yesterday as weakening crude prices dragged on the commodity-linked currency. The Bank of Canada’s (BoC) policy decision offered little relief, with Governor Tiff Macklem striking a neutral stance despite recent upbeat employment figures.
Canada’s trade balance is due today, and a projected increase in exports could lend CAD some modest support.
Australian dollar (AUD) drops as labour market weakens
The Australian dollar (AUD) sank overnight after Australia’s latest employment report revealed a sharp fall in full-time positions and a dip in participation, both of which weighed heavily on AUD sentiment.
New Zealand dollar (NZD) follows AUD lower
The New Zealand dollar (NZD) also retreated, dragged down by its close positive correlation with AUD and by a generally cautious tone across global markets.
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