Pound (GBP) rangebound amid muted trading
The pound (GBP) traded sideways on Tuesday, with a thin UK data schedule leaving Sterling without direction.
Calm conditions across wider markets also helped suppress volatility, limiting movement in the currency.
With the UK economic calendar remaining light today, the pound may again struggle to gain momentum.
Euro (EUR) subdued as markets remain calm
The euro (EUR) moved largely in line with its peers yesterday, fluctuating within a narrow range.
A lack of Eurozone economic releases and a cautious market mood restrained EUR demand, while softness in the US dollar (USD) failed to provide support despite the euro’s inverse relationship with the greenback.
Looking ahead, attention turns to Germany’s latest consumer confidence figures. Sentiment improved more than expected heading into February, which could offer the euro some limited support.
US dollar (USD) slides further on policy uncertainty
The US dollar underperformed its peers yesterday, sliding to new multi-year lows as bearish momentum gathered pace.
Investor confidence in the greenback has been undermined by growing fears of another US government shutdown, concerns over potential political pressure on the Federal Reserve, and renewed tariff threats from US President Donald Trump aimed at Canada and South Korea.
Today, USD exchange rates may remain fragile ahead of this evening’s Federal Reserve policy decision. While no change in interest rates is expected, speculation that Trump could announce his preferred candidate for the next Fed Chair around the decision could add to volatility.
Canadian dollar (CAD) pressured near multi-month lows
The Canadian dollar (CAD) hovered close to multi-month lows yesterday as strained US-Canada trade relations continued to weigh on sentiment towards the ‘loonie’.
Later today, the Bank of Canada (BoC) will deliver its latest interest rate decision. Should policymakers leave rates unchanged and indicate they remain at neutral levels, the Canadian dollar could see a modest rebound.
Australian dollar (AUD) firms as inflation edges higher
The Australian dollar (AUD) strengthened during the overnight session after December inflation data showed a modest uptick, reinforcing expectations of an interest rate hike from the Reserve Bank of Australia (RBA).
New Zealand dollar (NZD) unsettled amid uneven sentiment
The New Zealand dollar (NZD) experienced some volatility during the Asian trading session as mixed market sentiment drove uneven price action.
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