Pound News: Steady UK Inflation Boosts BoE Rate Hike Odds
Investors were pleasantly surprised to find that the headline UK consumer price index had held steady at 3.0% in January, boosting demand for the Pound (GBP).
However, while GBP exchange rates initially made solid gains on the back of the higher-than-expected inflation rate it was not long before the Pound started to lose some of its momentum.
Lingering worries over the Conservative government’s less-than-clear approach to the matter of Brexit are likely to see Sterling soften further today.
Euro News: EUR Exchange Rates Strengthen Ahead of Eurozone GDP
A lack of fresh Eurozone data failed to hold back the Euro (EUR) on Tuesday, with the single currency finding support from wider market developments.
Negative reaction to the Trump administration’s proposed budget helped to shore up EUR exchange rates, especially as global stock markets continued to push higher.
If the fourth quarter Eurozone gross domestic product data shows that the currency union ended 2017 on a strong footing, carrying solid momentum into 2018, the mood towards the Euro could improve further.
US Dollar News: Prospect of 1 Trillion Dollar Deficit Spooks Investors
While the NFIB small business optimism index showed a moderate improvement on the month this was not enough to boost US Dollar (USD) exchange rates yesterday.
Demand for the US Dollar remained muted in the wake of the Trump administration’s unveiled 2019 fiscal year budget, which has the potential to push the deficit up to 1 trillion USD.
This afternoon’s US consumer price index data could put additional downside pressure on the US Dollar, with forecasts pointing towards a dip in inflationary pressure.
Canadian Dollar News: Oil Prices Retreat Further on IEA Forecast
Oil prices continued to slide on the back of an International Energy Agency (IEA) report which noted that US production is likely to match global demand growth in 2018.
This gave investors little cause for confidence, keeping the commodity-correlated Canadian Dollar (CAD) on a generally weaker footing even as the wider sense of market risk appetite improved.
Unless tonight’s US crude oil inventories figure shows a drawdown on the week CAD exchange rates are unlikely to find any particular rallying point in the near term.
Australian Dollar News: Improved Business Confidence Failed to Shore up AUD
Even though the NAB business confidence index showed an uptick on the month in January the Australian Dollar (AUD) was unable to capitalise on this improvement.
Concerns remain over the underlying health of the Australian economy, especially as the NAB survey highlighted continued weakness in both wage and jobs growth.
With anticipation building for tomorrow’s labour market data AUD exchange rates are expected to lack any particular support today.
Wednesday, 14 February
09:00 Eurozone Gross Domestic Product
13:30 US Consumer Price Index
13:30 US Advance Retail Sales