Pound (GBP) steady as Bailey sidesteps policy discussion
The pound (GBP) moved in a narrow range throughout yesterday’s session, with markets looking ahead to a speech by Bank of England (BoE) Governor Andrew Bailey.
Following the BoE’s decision to raise interest rates at its November meeting, GBP investors were hoping for further clues about the bank’s policy outlook. However, Bailey ultimately made no reference to monetary policy in his remarks.
Attention now turns to another BoE official, Clare Lombardelli, who is due to speak later today. As one of the bank’s more hawkish policymakers, could her comments provide fresh support for the pound?
Euro (EUR) subdued as ECB succession race attracts attention
The euro (EUR) also struggled to find direction on Monday, as speculation over who might replace Christine Lagarde as President of the European Central Bank (ECB) came into focus.
Both hawkish and dovish candidates appear to be leading the race, with the eventual successor likely to have a considerable influence on the ECB’s approach to communicating monetary policy.
With no notable eurozone data scheduled, the single currency may lack a clear directional impetus today.
US dollar (USD) retreats as traders lock in profits
The US dollar (USD) started the week on the back foot, with profit-taking dragging on the currency after its sharp advance towards the end of the previous session.
The ‘greenback’ also faced pressure from improving risk appetite, following a widespread recovery across global equity markets.
Looking ahead, today’s focus falls on the latest US consumer price index. The US dollar could rebound if an increase in inflation reinforces expectations of further Federal Reserve interest rate rises.
Canadian dollar (CAD) weakens as Brent hits two-month low
The Canadian dollar (CAD) edged lower on Monday, as another steep fall in oil prices weighed on the commodity-linked currency.
The ‘loonie’ could come under further pressure during today’s session if crude prices continue to decline.
Australian dollar (AUD) rangebound as confidence deteriorates
The Australian dollar (AUD) traded within a narrow range overnight, following the release of the latest consumer and business confidence figures, which pointed to a further deterioration in sentiment across the Australian economy.
New Zealand dollar (NZD) supported by election relief
The New Zealand dollar (NZD) continued to move higher during Monday’s overnight session, as investors remained relieved that the ruling coalition appears to have the narrowest route to retaining power.
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