Pound (GBP) subdued as BoE decision looms
Yesterday the pound (GBP) continued this week’s trend of trading without a clear direction, as UK economic data remained thin on the ground.
Sterling was also muted by the Bank of England’s (BoE) looming interest rate decision, which is due to be announced today.
The bank is expected to leave interest rates unchanged, leaving investors to focus on the forward guidance. If policymakers at the BoE sound concerned about upside inflation risks, GBP could firm.
Euro (EUR) firms amid Eurozone CPI
The euro (EUR) gained ground against its weaker rivals yesterday in the wake of the Eurozone’s final consumer price index for February.
Although the CPI figures printed in line with preliminary estimates, the uptick from 1.7% to 1.9% showed that inflationary pressures were rising even before the conflict in the Middle East saw energy prices spike.
Looking forward, the European Central Bank (ECB) decision today could support EUR, if the bank indicates that it’s wary of how higher energy prices could feed through into inflation.
US dollar (USD) boosted by hot PPI print
The US dollar (USD) strengthened yesterday as the latest US producer price index showed a jump in factory gate inflation in February.
The ‘greenback’ then pushed higher in the evening following the Federal Reserve decision, as the central bank raised its inflation forecast due to the war in Iran.
With the Fed decision now out the way, USD may take its cues from market risk appetite over the coming session. Could a gloomy mood see the US dollar push higher?
Canadian dollar (CAD) regains ground as oil prices rise
The Canadian dollar (CAD) rallied yesterday, with the crude-linked currency tracking movements in the oil market. This helped CAD avoid losses following the Bank of Canada (BoC) interest rate decision, as the bank highlighted the growth risks of rising global energy prices.
Looking ahead, oil prices could be the primary catalyst for movement in the ‘loonie’ today. Volatility in energy markets could see CAD waver.
Australian dollar (AUD) rangebound despite rising unemployment
The Australian dollar (AUD) moved sideways overnight, with the ‘Aussie’ managing to shrug off an unexpected rise in Australian unemployment last month.
New Zealand dollar (NZD) steady in spite of weaker GDP
Likewise, the New Zealand dollar (NZD) showed resilience during the overnight session, holding steady despite domestic GDP slowing more than forecast in the fourth quarter.
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