Pound (GBP) supported by Bailey’s inflation warnings
The pound (GBP) found modest support during yesterday’s session as markets assessed comments from Bank of England (BoE) Governor Andrew Bailey.
Bailey cautioned that inflationary pressures are increasing as energy prices remain elevated, reaffirming that the BoE is ‘fully committed’ to bringing inflation back to its target.
Meanwhile, a quiet UK economic calendar could leave Sterling struggling to establish a clear direction today.
Euro (EUR) weighed down by continued Eurozone bond market turmoil
The euro (EUR) remained under pressure on Thursday as the selloff across European bond markets continued.
France’s escalating debt crisis remained a major concern for EUR investors, with fears surrounding the debt burden of the Eurozone’s second-largest economy continuing to affect markets across the region.
With little indication that the crisis will ease in the near term, the euro is likely to remain vulnerable to headwinds for the rest of this week’s session.
US dollar (USD) lifted by rising global inflation concerns
The US dollar (USD) broadly advanced throughout yesterday’s session, with the safe-haven currency attracting modest demand as higher energy prices fuelled concerns over inflation.
The USD also drew support from an unexpected decline in US initial jobless claims, which fell last week to their lowest level since mid-July.
The University of Michigan’s latest US consumer sentiment index will be the final major release of this week’s session. Could a further deterioration in sentiment this month prompt the US dollar to surrender some of its recent gains?
Canadian dollar (CAD) strengthened by rising oil prices
The Canadian dollar (CAD) generally moved higher on Thursday, with the commodity-linked currency benefiting from the latest increase in global oil prices.
Canada’s latest employment report is due later today, and the ‘loonie’ could come under pressure if September’s figures show that the labour market contracted for a second consecutive month.
Australian dollar (AUD) climbs as risk appetite improves
The Australian dollar (AUD) strengthened during overnight trading as falling oil prices helped lift market sentiment.
New Zealand dollar (NZD) supported by improving market sentiment
The New Zealand dollar (NZD) also gained ground overnight as the broader market mood improved.
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