Pound (GBP) struggles following UK inflation
The pound (GBP) softened during yesterday’s session as GBP investors seemed unimpressed by the UK’s latest consumer price index.
While headline inflation rose from 2.9% to 3.1% in August, core inflation held steady at 2.6% and both measures printed in line with forecasts. This crystallised bets that the Bank of England (BoE) will leave interest rates on hold later today.
With markets anticipating no change in policy, the focus will be on the bank’s accompanying commentary. If the BoE maintains its cautious stance, Sterling could slip.
Euro (EUR) rangebound amid industrial data
The euro (EUR) wavered yesterday following lacklustre Eurozone industrial production data.
While output contracted 0.1% in July, this was less bad than the expected 0.2% decline.
The Eurozone’s final CPI for August could underpin EUR today, if it confirms that inflation jumped last month. However, movement may be limited unless the data deviates from the preliminary estimate.
US dollar (USD) soars as Fed hikes rates
The US dollar (USD) pushed higher against its weaker peers yesterday, while holding steady elsewhere, as stronger-than-forecast US retail sales figures supported USD.
The ‘greenback’ then surged in the evening after policymakers at the Federal Reserve unanimously voted to raise interest rates for the first time since 2023.
Turning to today, USD has eased off yesterday’s multi-month highs as some investors look to book their profits. However, the currency could stay afloat amid the afterglow of the Fed decision.
Canadian dollar (CAD) unsure despite weakening oil prices
The crude-linked Canadian dollar (CAD) traded without a clear direction on Wednesday, with the ‘loonie’ managing to regain some lost ground later in the session despite cooling oil prices.
Canada’s latest producer price index could influence the ‘loonie’ today. If price growth stalled in August, CAD could face some pressure.
Australian dollar (AUD) buoyed by risk-on mood
The Australian dollar (AUD) rose overnight as an improving market mood underpinned AUD.
New Zealand dollar (NZD) finds support as GDP beats forecasts
The New Zealand dollar (NZD) found its footing during Thursday’s Asian trading session thanks to a risk-on mood and stronger-than-forecast GDP figures.
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