Pound (GBP) falls amid dovish BoE comments
The pound (GBP) stumbled yesterday as worries about the Russia-Ukraine war weighed on the UK currency.
In addition, commentary from some Bank of England (BoE) officials added to Sterling’s downside. The bank warned about the risk of job losses in the coming months, while one policymaker hinted that the BoE could cut interest rates faster than markets expect.
Turning to today, the UK’s consumer price index this morning is boosting the pound. British inflation accelerated last month, from 1.7% to 2.3%, causing investors to trim their bets on a BoE rate cut in December.
Euro (EUR) pressured amid Russia-Ukraine fears
The euro (EUR) also fell on Tuesday as tensions between Russia and the West flared, with the Kremlin warning that it might consider a nuclear response to Ukraine using US weapons to strike targets within Russian territory.
Later in the session, EUR was able to regain ground against some rivals thanks to a pullback in the US dollar (USD), with which the euro is negatively correlated.
Looking ahead, a speech from European Central Bank (ECB) President Christine Lagarde may influence the euro this afternoon, with any dovish remarks potentially denting the common currency.
US dollar (USD) wavers despite risk aversion
The US dollar initially strengthened yesterday as the risk-off mood provided the American currency with safe-haven flows.
However, the ‘greenback’ couldn’t sustain its upside, with USD slipping later in the evening following a decline in US Treasury yields.
With notable US economic data absent from the calendar today, risk appetite could drive USD once again. Will ongoing anxiety around the Russia-Ukraine war provide the ‘greenback’ with support?
Canadian dollar (CAD) boosted by hot inflation reading
The Canadian dollar (CAD) leapt higher yesterday evening after Canada’s latest CPI beat forecasts.
Headline Canadian inflation leapt from 1.6% to 2% in October, beating forecasts for 1.9%. This dampened bets on further rate cuts from the Bank of Canada (BoC).
There’s no Canadian data due to be published today, which could leave the ‘loonie’ vulnerable to oil price dynamics. Could rising prices boost CAD?
Australian dollar (AUD) struggles amid souring mood
The Australian dollar (AUD) softened against many of its rivals overnight amid a risk-off market mood.
New Zealand dollar (NZD) slips in cautious trade
The New Zealand dollar (NZD) also weakened last night as anxious trade gripped markets.
