Pound (GBP) rangebound despite strong GDP print
The pound (GBP) traded sideways against most of its peers yesterday as GBP investors largely shrugged off the UK's latest GDP figures, despite reporting the country's strongest growth in over two years.
Markets were unfazed as they didn't see the data as enough to encourage the Bank of England (BoE) to adopt a more hawkish approach to its current tightening cycle.
Notable UK data is in short supply today, which may leave the pound to trade with limited direction.
Euro (EUR) subdued amid ECB-Fed policy divergence
The euro (EUR) was muted on Thursday, undermined by the perceived divergence in policy between the European Central Bank (ECB) and the US Federal Reserve.
While the US central bank looks set to hike rates more aggressively, EUR investors expect the ECB to remain welded to its more measured approach to monetary policy.
The Eurozone's second estimate of third-quarter GDP may limit EUR demand today as the data is expected to confirm a moderation of growth in the bloc and highlight the challenges facing its two largest economies, France and Germany.
US dollar (USD) buoyed by Fed rate hike bets
The US dollar (USD) was propelled to a fresh year-to-date high on Thursday, as USD investors remained bullish on Fed tightening expectations.
However, the 'greenback' began to run out of steam towards the end of the session, following a larger-than-expected increase in new US jobless claims last week.
Closing out this week's session is the publication of the latest US producer price index, with the US dollar potentially softening if a moderation of factory input prices tempers bets the Fed might deliver a 50 basis-point rate hike next month.
Canadian dollar (CAD) firms as oil prices edge higher
The Canadian dollar (CAD) ticked higher on Thursday, supported by a modest upswing in oil prices after US President Donald Trump claimed the US doesn't need to make a deal with Iran.
If oil prices maintain a positive trajectory, it could help to underpin the 'loonie' as we head into the weekend.
Australian dollar (AUD) slips in risk-off trade
The Australian dollar (AUD) remained on the defensive overnight on Thursday amid a broadly risk-averse market mood.
New Zealand dollar (NZD) muted amid moderation of factory growth
The New Zealand dollar (NZD) also weakened in overnight trade as New Zealand's latest manufacturing PMI fell short of expectations.
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