Pound (GBP) fluctuates amid mixed jobs data
The pound (GBP) was uncertain yesterday, trading in a wide range amid market volatility and a mixed UK jobs report.
New data showed that the British unemployment rate unexpectedly held at a multi-year high in November, despite a larger-than-forecast rise in employed people over the same period.
Turning to today, focus shifts to the UK’s latest consumer price index. Although inflation beat forecasts to rise from 3.2% to 3.4% in December, GBP’s response has been muted so far.
Euro (EUR) jumps as German data beats forecasts
The euro (EUR) leapt to multi-week highs yesterday, with the currency initially underpinned by its strong inverse relationship with the embattled US dollar (USD).
EUR received a further boost thanks to Germany’s ZEW economic sentiment index, which smashed forecasts to surge to its highest level since July 2021.
Later today, European Central Bank (ECB) President Christine Lagarde is due to speak. Any comments on how tariffs could impact the Eurozone economy or inflation could affect EUR.
US dollar (USD) continues to slide amid tariff threats
The US dollar continued to decline yesterday, with USD close to striking a year-to-date low, as President Donald Trump’s latest tariff threats weighed heavily on the currency.
Investors fear that if Trump levies new tariffs on European partners, the EU may retaliate with its own tariffs, denting the US economy, while European investors may reduce their purchases of US Treasuries.
Today, Trump heads to Davos to address the World Economic Forum. If he strikes a combative tone, we could see more USD selling.
Canadian dollar (CAD) recoups losses as oil prices rise
The crude-linked Canadian dollar (CAD) initially weakened yesterday, although it managed to bounce back against some peers in the afternoon thanks to an uptick in oil prices.
Oil price movements could influence the commodity-linked ‘loonie’ again during today’s session. Could softening prices dent CAD?
Australian dollar (AUD) buoyed by higher commodity prices
The Australian dollar (AUD) firmed overnight as rising commodity prices and a risk-on mood in Chinese markets both reflected positively on the ‘Aussie’.
New Zealand dollar (NZD) enjoys improving mood
The New Zealand dollar (NZD) likewise gained ground thanks to an improvement in market risk appetite.
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