Pound (GBP) dented by BoE rate decision
The pound (GBP) edged lower yesterday, following the Bank of England’s (BoE) latest interest rate decision.
While the BoE left interest rates on hold as was widely expected, Sterling faced some selling pressure after BoE Governor Andrew Bailey made it clear that the bank’s current cutting cycle is not complete.
Meanwhile, the pound is under pressure this morning as a spike in UK government borrowing raises fresh budget concerns and offsets a stronger-than-expected retail sales print.
Euro (EUR) flat on ECB de Guindos comments
The euro (EUR) was stable on Thursday as EUR investors digested the latest comments from European Central Bank (ECB) Vice-President Luis de Guindos.
Speaking in London, de Guindos suggested the bank should follow a ‘very prudent’ approach to monetary policy amid the current high levels of uncertainty.
Turning to today’s session with EUR data in short supply, the euro may trade without a strong directional bias.
US dollar (USD) fluctuates post Fed rate cut
Trade in the US dollar (USD) was mixed yesterday. The ‘greenback’ initially surrendered the bulk of the gains it notched in the immediate aftermath of the Federal Reserve’s latest policy decision, as investors remained convinced the Fed will deliver two more cuts before the end of 2025.
USD demand then rebounded in response to a larger-than-expected fall in US initial jobless claims last week.
US data is thin on the ground at the end of this week, but we could continue to see the US dollar influenced by Fed rate speculation.
Canadian dollar (CAD) buoyed by USD strength
The Canadian dollar (CAD) trended broadly higher on Thursday, thanks to its positive correlation with the US dollar.
Canada will publish its latest retail sales figures later today, with the ‘loonie’ potentially ending the week on a sour note if sales growth continued to contract in August.
Australian dollar (AUD) slides in risk-averse trade
The Australian dollar (AUD) ticked lower overnight on Thursday as renewed USD demand sapped market risk appetite.
New Zealand dollar (NZD) pressured by weak trade data
The New Zealand dollar (NZD) also retreated in overnight trade as domestic trade data reported a shock decline in exports last month that ballooned New Zealand’s trade deficit to a ten-month high.
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