Euro to slide to multi-month lows on dovish ECB rate decision?

Pound (GBP) rangebound in quiet trade

The pound (GBP) struggled to find momentum yesterday, amid a lull in notable UK data.

GBP investors also remained cautious amid ongoing concerns over the UK’s recent economic performance.

UK economic data remains in short supply today, likely leaving the pound without any strong directional bias.

Euro (EUR) muted ahead of ECB rate decision

The euro (EUR) was subdued through Wednesday’s trading session as EUR investors were reluctant to alter their positions in the single currency ahead of the European Central Bank’s (ECB) latest interest rate decision.

While the ECB is widely expected to cut interest rates following its final policy meeting of 2024, there is some uncertainty surrounding the bank’s forward guidance.

Unsurprisingly, the ECB’s rate decision will be in the spotlight today. Expect the euro to test new lows if policymakers hint at further interest rate cuts in the coming months.

US dollar (USD) buoyed by rising inflation

The US dollar (USD) trended broadly higher yesterday, following the publication of the latest US consumer price index.

The CPI figures reported US inflation accelerated to a four-month high in November, causing some USD investors to trim their Federal Reserve interest rate cut bets.

Coming up, the latest US producer price index could also lift the US dollar later this afternoon, if November’s index also points to rising price pressures in American factories.

Canadian dollar (CAD) strengthens despite BoC’s 50bps rate cut

The Canadian dollar (CAD) rallied on Wednesday. While the Bank of Canada (BoC) delivered a 50bps rate cut, this has been widely priced in by markets, allowing the ‘loonie’ to climb as the bank’s forward guidance dropped its reference to further rate cuts if the economy evolves as forecast.

The ‘loonie’ may look to build on these gains through today’s session if oil prices continue to rise.

Australian dollar (AUD) jumps on better-than-expected jobs data

The Australian dollar (AUD) rallied overnight on Wednesday, as a surprisingly strong domestic jobs report helped to temper Reserve Bank of Australia (RBA) rate cut bets.

New Zealand dollar (NZD) buoyed by risk-on mood

The New Zealand dollar (NZD) also strengthened in overnight trade, supported by the uptick in the ‘Aussie’ and an improvement in market risk appetite.

---

Never miss a movement. Create a free account with Currencies Direct to get the latest currency news delivered straight to your inbox. You can also set up rate alerts and check live rates 24/7.