Pound (GBP) weakens after UK inflation release
The pound (GBP) lost ground during yesterday’s trading session as GBP markets appeared underwhelmed by the latest UK consumer price index.
Although headline inflation accelerated from 2.9% to 3.1% in August, core inflation remained at 2.6%, with both readings matching expectations. The figures reinforced market bets that the Bank of England (BoE) will keep interest rates unchanged later today.
With no adjustment to monetary policy currently expected, attention will turn to the BoE’s accompanying guidance. Should the central bank retain its cautious tone, Sterling could come under further pressure.
Euro (EUR) fluctuates following industrial production figures
The euro (EUR) traded without a clear direction yesterday after disappointing Eurozone industrial production data.
Industrial output fell by 0.1% in July, although the decline was smaller than the 0.2% contraction markets had anticipated.
Today, the Eurozone’s final CPI reading for August could offer some support to EUR if it confirms that inflation accelerated last month. However, the impact could be limited if the figures simply match the preliminary estimate.
US dollar (USD) rallies as Fed raises rates
The US dollar (USD) strengthened against its weaker counterparts yesterday while remaining broadly steady elsewhere, with better-than-expected US retail sales data lending support to USD.
The ‘greenback’ then jumped during the evening after Federal Reserve policymakers unanimously voted to increase interest rates for the first time since 2023.
Looking ahead to today, USD has retreated from yesterday’s multi-month highs as some investors appear to be taking profits. Nevertheless, the currency could remain supported by the lingering impact of the Fed’s decision.
Canadian dollar (CAD) directionless despite softer oil prices
The oil-sensitive Canadian dollar (CAD) lacked a clear direction on Wednesday, with the ‘loonie’ recovering some of its earlier losses later in the session despite a decline in oil prices.
Canada’s latest producer price index could provide fresh direction for the ‘loonie’ today. If producer price growth stalled in August, CAD could come under pressure.
Australian dollar (AUD) supported by improving risk appetite
The Australian dollar (AUD) moved higher overnight as a more positive market mood provided support for AUD.
New Zealand dollar (NZD) supported as GDP exceeds expectations
The New Zealand dollar (NZD) strengthened during Thursday’s Asian session, finding support from improved risk appetite and stronger-than-expected GDP data.
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