Pound slips following BoE remarks

Pound (GBP) stumbles amid BoE commentary

The pound (GBP) softened yesterday following mixed comments from Bank of England (BoE) Chief Economist Huw Pill.

Although Pill – one of the dissenters who voted against a rate cut earlier this month – argued the pace of policy easing has been ‘too rapid’, he also said he believes the path for rates remains ‘downward’ as the ‘underlying disinflation process remains intact’.

This morning, the UK’s consumer price index exceeded forecast to surge from 2.6% to 3.5%. While this could dampen BoE rate cut bets and support Sterling, concerns about rising government borrowing costs could cap any gains.

Euro (EUR) firms despite drop in German PPI

The euro (EUR) initially stumbled yesterday as a steep drop in German producer prices fuelled bets on more European Central Bank (ECB) interest rate cuts.

However, a risk-off market mood and weaker US dollar (USD) helped the common currency firm as the session progressed.

Later today, ECB Chief Economist Philip Lane is due to deliver a speech. Could dovish comments dent the euro?

US dollar (USD) subdued in wake of credit downgrade

The US dollar trended lower yesterday as the US credit rating downgrade from Moody’s on Monday continued to pressure the ‘greenback’.

USD attempted a modest recovery as the session unfolded, with a gloomy mood providing safe-haven flows, but the currency slipped again when US markets opened.

Looking ahead, today’s session brings a lack of notable US data. As a result, lingering concerns over the US economy or debt levels could pressure the ‘greenback’, while any trade news from Donald Trump could also trigger movement.

Canadian dollar (CAD) buoyed by hotter inflation

The Canadian dollar (CAD) firmed against weaker peers yesterday after Canada’s latest CPI came in higher than forecast, with core inflation unexpectedly rising from 2.2% to 2.5%. However, falling oil prices tempered the commodity-linked currency’s potential.

In the absence of market-moving Canadian data today, CAD’s movement may be determined by oil price dynamics.

Australian dollar (AUD) flat in aftermath of RBA decision

The Australian dollar (AUD) traded mostly sideways overnight. Although an improvement in the market mood supported AUD, the Reserve Bank of Australia’s (RBA) dovish interest rate decision kept the ‘Aussie’ in check.

New Zealand dollar (NZD) quiet despite upbeat trade data

The New Zealand dollar (NZD) failed to sustain its upside following positive trade data overnight, as NZD’s correlation with AUD kept the ‘kiwi’ muted.

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