Pound (GBP) uncertain following BoE comments
The pound (GBP) faced uneven movement yesterday, with Sterling losing ground against stronger peers amid a lack of UK data.
GBP may have been influenced by comments from Bank of England (BoE) Chief Economist Huw Pill. While Pill suggested interest rates would need to rise, he also pushed back on markets pricing four rate hikes by September 2027.
Turning to today’s session ahead, the pound looks to attract fresh bids, after the UK’s latest GDP figures surprised to the upside, reporting an unexpected expansion in growth in August.
Euro (EUR) hits fresh lows on French fiscal fears
The euro (EUR) extended its recent selloff yesterday, hitting fresh multi-month lows, as fears of a French debt crisis continued to plague the currency.
Comments from European Central Bank (ECB) President Christine Lagarde also dented EUR, after she dampened rate hike bets by saying the bank isn’t yet seeing second-round inflation effects.
Today, the Eurozone’s latest industrial production figures are unlikely to offer EUR much support, as markets expected output in the bloc to have stalled in August.
US dollar (USD) catapulted higher by US CPI
The US dollar (USD) surged yesterday after the latest US consumer price index showed headline and core inflation accelerated more than expected in September.
The data revived bets that the Federal Reserve could raise interest rates this month, with market odds for a 25-basis-point hike in October jumping from 22% to as high as 47%.
Looking forward, the latest US producer price index and retail sales are scheduled for release today, with USD investors potentially focusing on the latter. With sales growth expected to have sharply slowed in September, the ‘greenback’ could come under pressure.
Canadian dollar (CAD) buoyed by high oil prices
The crude-linked Canadian dollar (CAD) strengthened yesterday as oil prices remained elevated, while CAD’s positive correlation with the US dollar also supported the currency.
Oil price dynamics could drive the Canadian dollar today. If crude prices hold near recent highs, the ‘loonie’ could attract further support.
Australian dollar (AUD) slides as employment data disappoints
The Australian dollar (AUD) retreated through Thursday’s Asian trading session, after a shock contraction in the labour market last month undermined Reserve Bank of Australia (RBA) rate hike expectations.
New Zealand dollar (NZD) buoyed by USD weakness
The New Zealand dollar (NZD) appreciated in overnight trade, supported by a pullback in the US dollar that helped to strengthen market risk appetite.
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