Pound (GBP) sidelined ahead of GDP data
The pound (GBP) was left largely rangebound yesterday as the continued lull in UK economic releases left the currency without clear impetus.
GBP investors were also reluctant to alter their positions in Sterling ahead of the release of the only key domestic data of the week, the UK’s latest GDP print.
Said GDP data may help underpin the pound today, as month-on-month growth surprised to the upside in July with a 0.4% expansion.
Euro (EUR) muted as ECB rate hike disappoints hawks
The euro (EUR) traded sideways on Thursday as the European Central Bank (ECB) delivered its latest interest rate decision.
With the ECB’s 25bps rate hike fully priced in ahead of the meeting, the focus was on the bank’s guidance. This led EUR to falter as the ECB’s policy statement and accompanying comments from ECB President Christine Lagarde failed to meet the more hawkish expectations of EUR investors.
Turning to today’s session, Lagarde is scheduled to speak again later in the session, but barring her striking a decidedly more hawkish note, the impact on EUR may be limited.
US dollar (USD) jumps as producer inflation accelerates
The US dollar (USD) enjoyed broad support on Thursday, initially firming as fresh energy price uncertainty bolstered demand for safe-haven assets.
The ‘greenback’ then consolidated these gains with the release of the latest US producer price index, where a 0.4% acceleration in factory-gate prices last month bolstered expectations for today’s consumer inflation report.
If August’s consumer price index points to a similar lift in inflationary pressures for households, it’s likely to extend additional support to the US dollar as it consolidates bets that the Federal Reserve will hike interest rates next week.
Canadian dollar (CAD) firms as oil strikes $107
The Canadian dollar (CAD) appreciated yesterday, with surging oil prices helping the commodity-linked currency to shake off US-Canadian trade war jitters.
The trajectory of the ‘loonie’ is likely to continue to reflect movement in oil prices today, with CAD exchange rates potentially coming under pressure as Brent crude begins to retreat from yesterday’s highs.
Australian dollar (AUD) wobbles in mixed trade
The Australian dollar (AUD) fluctuated overnight on Thursday, initially softening in risk-off trade; the ‘Aussie’ then rebounded as market sentiment began to recover.
New Zealand dollar (NZD) jumps as sentiment improves
The New Zealand dollar (NZD) rallied sharply in overnight trade, with the ‘kiwi’ attracting support even before the mood improved, as it benefitted from some dip-buying from price-conscious investors.
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