US dollar strikes new multi-month low as Fed slashes US growth outlook

Pound (GBP) muted as BoE rate decision looms

The pound (GBP) traded without strong directional bias on Wednesday as GBP investors were reluctant to adjust their positions ahead of the Bank of England’s (BoE) latest interest rate decision.

The BoE is widely expected to leave its monetary policy untouched today, leaving the focus on the bank’s forward guidance.

If the recent uptick in UK inflation causes the bank to push back on expectations the BoE will cut rates again in May, Sterling could accelerate.

Euro (EUR) undermined by Trump-Putin call disappointment

The euro (EUR) was pressured through yesterday’s session amid the scepticism surrounding the talks between US President Donald Trump and his Russian counterpart, Vladimir Putin.

During the call on Tuesday, Putin refused to commit to Trump’s ceasefire plan, with the Russian President making demands which EU leaders claim are evidence he is not serious about ending the war in Ukraine.

European Central Bank (ECB) President Christine Lagarde is speaking this morning. If she strikes a hawkish chord, the single currency is likely to strengthen.

US dollar (USD) retreats as Fed slashes US growth forecast

The US dollar (USD) stumbled during yesterday’s trading session, following the conclusion of the Federal Reserve’s March policy meeting.

While the Fed’s decision to leave interest rates on hold again was already priced in by USD investors, the US central bank’s slashing of its US growth outlook dragged on the ‘greenback’.

Meanwhile, the US dollar has already clawed back most of these losses overnight as market risk appetite soured. If investors continue to favour safe-haven assets, we may see the US dollar extend this recovery through today’s session.

Canadian dollar (CAD) muted as oil prices soften

The Canadian dollar (CAD) struggled to attract support on Wednesday as a softening of oil prices limited the appeal of the commodity-linked currency.

Notable Canadian data is in short supply today, which is likely to leave movement in the ‘loonie’ to be driven by oil price dynamics.

Australian dollar (AUD) slumps as Australian jobs report disappoints

The Australian dollar (AUD) retreated overnight on Wednesday as Australia’s latest jobs report revealed a shock decline in employment growth last month.

New Zealand dollar (NZD) weakens despite positive GDP figures

The New Zealand dollar (NZD) also softened in overnight trade, with a souring market mood pulling the ‘kiwi’ lower, despite New Zealand’s latest GDP figures reporting a larger-than-expected rebound in growth at the end of 2024.

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