Pound (GBP) wavers after BoE remarks
The pound (GBP) traded in an unsettled fashion yesterday as the continued absence of UK economic releases left Sterling lacking clear direction.
Comments from Bank of England (BoE) policymaker Alan Taylor appeared to add to the indecision. While Taylor argued that further interest rate cuts may be appropriate, he also suggested borrowing costs could now be close to a neutral level.
Looking ahead, GBP could find some support today after the UK’s latest GDP figures surprised to the upside. The economy expanded by 0.3% in November, comfortably exceeding expectations for 0.1% growth.
Euro (EUR) lacks direction as US-Denmark meeting looms
The euro (EUR) struggled to find momentum yesterday as Greenlandic and Danish representatives travelled to the US for high-stakes discussions over Greenland’s future.
Optimism that diplomacy might prevail was tempered by renewed pressure from US President Donald Trump, who issued hawkish social media posts ahead of the talks.
Germany’s full-year GDP figures are due later today and could influence EUR movement. Should data show that the Eurozone’s largest economy barely expanded last year, demand for the single currency may remain subdued.
US dollar (USD) rebounds after robust retail sales
The US dollar (USD) came under pressure early yesterday as a decline in US Treasury yields weighed on the currency.
However, the ‘greenback’ regained lost ground later in the session following a stronger-than-expected rebound in US retail sales for November and further signs that producer price inflation remains stubborn.
Today, attention turns to last week’s initial jobless claims release. A rise in claims, as forecast, could put fresh pressure on USD.
Canadian dollar (CAD) seesaws despite firmer oil
The oil-sensitive Canadian dollar (CAD) experienced a volatile session yesterday, with rising crude prices offset by persistent concerns over the worsening relationship between the US and Canada.
CAD may remain unsettled today if geopolitical developments and oil price fluctuations continue to pull the currency in opposing directions.
Australian dollar (AUD) uneven as inflation signals offset risk aversion
The Australian dollar (AUD) traded unevenly overnight. Elevated consumer inflation expectations provided some support, though a subdued global risk appetite pressured the ‘Aussie’.
New Zealand dollar (NZD) dips as market mood turns sour
The New Zealand dollar (NZD) edged lower during the Asian session overnight as a souring market mood reduced demand for risk-sensitive currencies.
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