Pound (GBP) fluctuates following inflation release
The pound (GBP) edged higher during yesterday’s European trading hours, with Sterling brushing aside a slowdown in headline UK inflation as core price pressures showed continued persistence.
Despite this early resilience, the currency later surrendered its gains as investors maintained expectations that the Bank of England (BoE) will cut interest rates in March.
Attention now turns to the Confederation of British Industry’s (CBI) latest industrial trends orders survey. A further deterioration in demand conditions this month may place fresh pressure on the pound.
Euro (EUR) pressured by stalled Ukraine negotiations
The euro (EUR) moved lower yesterday as limited developments in ongoing Russia-Ukraine peace negotiations weighed on sentiment towards the single currency.
Investors were additionally unsettled by reports suggesting the US is urging Kyiv to consider territorial concessions to Moscow as part of efforts to secure a peace agreement by June.
Later today, the Eurozone’s preliminary consumer confidence reading is forecast to rise to its strongest level since October 2024, which may offer the euro some support.
US dollar (USD) advances on upbeat economic releases
The US dollar (USD) pushed higher yesterday amid choppy trading conditions, supported by a run of stronger-than-anticipated US data releases.
While durable goods orders still declined in December, the fall proved less severe than markets had predicted, while industrial production recorded a stronger-than-expected rise in January.
Focus now shifts to the latest US initial jobless claims, which could drive USD movement if they highlight either continued labour market strength or emerging weakness.
Canadian dollar (CAD) slips despite firmer oil prices
The oil-sensitive Canadian dollar (CAD) weakened yesterday even as crude prices ticked higher, as investors reassessed Bank of Canada (BoC) policy expectations following softer inflation figures earlier in the week.
Canada’s latest trade balance figures are due today, and evidence of a persistent deficit could act as a headwind for the ‘loonie’.
Australian dollar (AUD) rebounds on strong employment figures
The Australian dollar (AUD) climbed overnight on Wednesday, recovering ground after upbeat domestic employment data reinforced expectations of further policy tightening from the Reserve Bank of Australia (RBA).
New Zealand dollar (NZD) supported by improving sentiment
The New Zealand dollar (NZD) also strengthened in overnight trading, buoyed by a modest recovery in global risk appetite.
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