Pound (GBP) muted as inflation surge fails to impact BoE bets
The pound (GBP) faltered yesterday, despite the UK’s latest consumer price index reporting inflation surged to 3% in January.
Sterling faltered as the hotter-than-expected inflation print failed to move the dial regarding an expected interest rate cut from the Bank of England (BoE) in May.
Coming up, the Confederation of British Industry (CBI) will publish its latest industrial trends orders index later today, with the pound potentially coming under selling pressure if order growth continues to contract this month.
Euro (EUR) softens on Ukraine concerns
The euro (EUR) was placed on the defensive on Wednesday amid concern over the direction of Ukrainian peace talks.
This followed comments from US President Donald Trump appearing to blame Ukraine for starting the war with Russia and the subsequent pushback from Ukrainian President Volodymyr Zelenskyy.
Today’s session kicked off with the publication of Germany's latest producer price index, with the euro faltering as weaker-than-forecast factory gate prices sapped inflation expectations in the Eurozone.
US dollar (USD) bolstered by risk-off flows
The US dollar (USD) trended broadly higher yesterday, with the safe-haven currency catching bids as market risk sentiment deteriorated.
These gains were reinforced by the minutes from the Federal Reserve’s latest policy meeting as they reinforced the US central bank’s hawkish outlook on monetary policy.
Turning to today’s session, the US dollar could face some headwinds if initial jobless claims rose last week as expected.
Canadian dollar (CAD) buoyed by rising oil prices
The Canadian dollar (CAD) ticked higher on Wednesday as rising oil prices reflected positively on the commodity-linked currency.
Canadian data is in short supply today, which may leave the ‘loonie’ to continue to track movement in oil prices today.
Australian dollar (AUD) underpinned by US-China trade deal hopes
The Australian dollar (AUD) rallied overnight on Wednesday, following comments from US President Donald Trump, in which he floated the possibility of reaching a trade agreement with China.
New Zealand dollar (NZD) buoyed by positive risk flows
The New Zealand dollar (NZD) also firmed in overnight trade as the potential easing of US-China trade tensions buoyed market risk appetite.
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