Pound (GBP) slides as BoE holds rates steady
The pound (GBP) weakened yesterday after the Bank of England (BoE) opted to leave interest rates unchanged once again at its September policy meeting.
However, Sterling’s losses were limited after UK borrowing costs declined following the bank’s announcement that it would reduce the pace of its bond-selling programme.
Sterling could find some support today as the UK’s latest retail sales figures revealed an unexpected recovery in consumer spending during August.
Euro (EUR) weighed down by softer inflation reading
The euro (EUR) initially struggled on Thursday, with the previous day’s sharp rally in the US dollar (USD) continuing to weigh on the single currency.
EUR sentiment remained subdued following the release of the Eurozone’s latest consumer price index, as the finalised figures showed inflation had been revised slightly lower in August.
European Central Bank (ECB) President Christine Lagarde is due to speak later today. Could a more hawkish tone from Lagarde provide some relief for the euro?
US dollar (USD) retreats as investors take profits
The US dollar (USD) edged lower on Thursday following the Federal Reserve’s latest interest rate decision.
After surging late on Wednesday as the Fed delivered an especially hawkish rate hike, the ‘greenback’ gave back some of its gains as investors moved to lock in profits.
Looking ahead, the latest US industrial production figures could lend further support to the US dollar today if August’s data shows factory output recovered last month.
Canadian dollar (CAD) weakened by softer crude prices
The Canadian dollar (CAD) was subdued yesterday as diminishing concerns over oil supplies pushed Brent crude down to around $102 a barrel.
Looking ahead, expect oil price movements to remain a key driver of the ‘loonie’ through the rest of the week.
Australian dollar (AUD) lifted by hawkish RBA signals
The Australian dollar (AUD) climbed through Friday’s Asian session after Reserve Bank of Australia Governor Michelle Bullock warned that persistent inflation risks could require another interest rate increase.
New Zealand dollar (NZD) subdued amid cautious trading
The New Zealand dollar (NZD) was muted in overnight trade as renewed uncertainty across markets weighed on risk appetite.
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