US dollar surges as US inflation climbs to seven-month high

Pound (GBP) dented by UK economic concerns

The pound (GBP) came under pressure through yesterday’s session amid ongoing concerns over the UK’s economic trajectory.

Despite upbeat new growth forecasts from the National Institute of Economic and Social Research (NIESR), Sterling shrugged to shake off the general malaise currently surrounding the UK’s economic outlook.

However, the pound looks to mount a recovery today, after the UK’s latest GDP figures reported a surprise uptick in growth at the end of 2024.

Euro (EUR) buoyed by gloomy sentiment

The euro (EUR) trended broadly higher on Wednesday, with the safe-haven currency benefitting from a deteriorating market mood.

However, the upside in EUR exchange rates was kept in check by the single currency’s negative correlation with the US dollar (USD).

The Eurozone will publish its latest industrial production figures later today. Economists forecast factory output will have contracted in December, which may act as a headwind for the euro.

US dollar (USD) jumps as US inflation accelerates

The US dollar surged on Wednesday, in response to stronger-than-expected US headline and core inflation figures.

January’s surprisingly strong inflation print propelled USD exchange rates sharply higher as it triggered another trimming of Federal Reserve interest rate cut bets.

Coming up, the release of the latest US producer price inflation figures could extend the US dollar’s gains today, if January’s data points to another rise in underlying inflationary pressures.

Canadian dollar (CAD) undermined by tariff concerns

The Canadian dollar (CAD) struggled through yesterday’s trading session as CAD sentiment continued to be undermined by the threat posed by Donald Trump’s new metal tariffs.

The recent downturn in oil prices coupled with continued tariff jitters may keep the ‘loonie’ on the back foot today.

Australian dollar (AUD) fluctuates amid mixed mood

The Australian dollar (AUD) traded erratically overnight on Wednesday as an uncertain market mood infused volatility into the risk-sensitive currency.

New Zealand dollar (NZD) wavers in uneven trade.

The New Zealand dollar (NZD) also fluctuated overnight amid shifts in market risk appetite.

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