Pound (GBP) wavers amid data vacuum
The pound (GBP) fluctuated significantly yesterday, with a dearth of domestic economic statistics leaving Sterling vulnerable to broader market volatility.
Continued political instability in the UK also kept a lid on the pound, though investors found some relief in the diminishing threat of an imminent leadership contest against Prime Minister Keir Starmer.
Today’s attention for GBP traders turns to the UK’s fourth-quarter GDP release. With growth figures for the end of 2025 falling short of estimates, the data could weigh on the pound.
Euro (EUR) softens on geopolitical fears
The euro (EUR) dipped yesterday as anxieties surrounding the Russia-Ukraine conflict placed a burden on the single currency.
EUR encountered additional headwinds later in the day, driven by its strong inverse relationship with a strengthening US dollar (USD).
With the Eurozone data calendar empty today, market participants may look to an address by European Central Bank (ECB) official Piero Cipollone. However, his remarks are likely to have only a marginal effect on the euro.
US dollar (USD) bounces back on robust employment figures
The US dollar recovered from recent multi-day lows yesterday, bolstered by a non-farm payrolls report that significantly exceeded expectations.
In January, the US economy generated 130,000 new roles, surpassing the predicted 70,000, whilst the unemployment rate defied projections by falling from 4.4% to 4.3%.
Looking ahead, the latest US initial jobless claims data could influence the USD today. Investors are likely to remain responsive to any evidence regarding the resilience of the American labour market.
Canadian dollar (CAD) retreats as diplomatic friction mounts
After briefly hitting multi-week peaks against certain peers on Tuesday night, the oil-sensitive Canadian dollar (CAD) fell back significantly on Wednesday – despite climbing crude prices– owing to heightening friction between the US and Canada.
CAD trading may be guided by oil market dynamics in the upcoming session. If crude prices climb further, could this provide a lift for the ‘loonie’?
Australian dollar (AUD) hit by profit-taking
The Australian dollar (AUD) made initial gains overnight following higher-than-forecast Australian consumer inflation expectations. However, AUD subsequently lost ground as traders engaged in profit-taking.
New Zealand dollar (NZD) buoyed by positive sentiment
The New Zealand dollar (NZD) drifted upwards overnight, with a risk-on market mood providing support for the ‘kiwi’.
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