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Sterling Slides on BoE Negative Rate Speculation

Pound News: Inflation Slumps to Four-Year Low

The Pound edged lower on Wednesday after Britain’s inflation rate slumped below 1%, the lowest level in close to four years.

Weak consumer prices have fuelled further speculation that low inflation rates will mean the Bank of England (BoE) needs to take further action, possibly negative interest rates for the first time.

Looking ahead, Sterling could suffer further losses following the release of the UK’s service sector PMI data. If flash PMI data shows the country’s largest sector continued to contract at a fast pace, it will weigh on GBP.

Pound Euro News: Eurozone Inflation Hits Lowest Level Since 2016

The Pound Euro exchange rate slipped despite data revealing inflation in the Eurozone was revised down to a four-year low. Final data from Eurostat showed annual inflation posted at just 0.3%, the lowest since August 2016.

Earlier this morning, the single currency made gains, supported by the Franco-German proposal for a common fund which could move the bloc closer to a fiscal union.

Looking ahead to Thursday, the single currency could edge lower following the release of a slew of Eurozone PMI data. If flash data reveals activity in the manufacturing and service sectors continues to suffer, the Euro will slide.

Pound US Dollar News: FOMC Minutes and Jobless Claims in Focus

The Pound remained flat against the US Dollar on Wednesday as broader market volatility fell to its lowest level in more than two months ahead of the release of the Federal Reserve’s monetary policy minutes.

However, risk appetite decreased today after optimism over successful coronavirus vaccine trials were crushed.

Looking ahead, traders are likely to be focused on the release of last week’s US jobless claims data. If initial claims reveal the number of Americans out of work rises, but at lower levels than previous weeks, the US Dollar may find some support.

Pound Canadian Dollar News: Canada’s Inflation Turns Negative

The Canadian Dollar rose against the Pound on Wednesday despite data showing annual inflation in Canada slumped by -0.2% in April, while monthly inflation fell by -0.7%. This was the first time inflation turned negative since 2009.

The commodity-linked ‘Loonie’ edged higher this morning with the support of oil prices holding steady and signs of improving demand.

Looking ahead, the Canadian Dollar could drop following the release of ADP’s employment change data. If the number of Canadians out of work skyrockets in April, the ‘Loonie’ may suffer losses on Thursday.

Pound Australian Dollar News: AUD Hits Two-Month High Overnight

The Pound Australian Dollar exchange rate slumped on Wednesday after the ‘Aussie’ hit a two-month high overnight against the US Dollar.

The Australian Dollar made gains despite a report from medical news website STAT reporting early data from US firm, Moderna Inc, into a coronavirus vaccine was insufficient. This came a day after hopes of a vaccine sparked market optimism yesterday

Looking ahead, the ‘Aussie’ could slide following a speech from the Reserve Bank of Australia’s (RBA) Governor Philip Lowe. If Lowe is overly dovish about the extent the coronavirus will hurt the economy, AUD could suffer.

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