Pound Inches Lower Ahead of BOE, Aussie Slips
The sterling declines ahead of the Bank of England’s policy rate decision, while the antipodean currencies underperform their Group-of-10 peers after Australia’s February employment data missed estimates.
GBP/USD down 0.1% to 1.2993
The Bank of England is likely to turn less dovish on Thursday as officials start to fret about the fallout from Donald Trump’s tariff wars and a renewed bout of domestic inflation
Market participants may wind back pricing for May cut if the BOE is concerned about still too high wages growth, Joseph Capurso, head of international economics at Commonwealth Bank of Australia, writes in a note
The wind-back would modestly boost GBP/USD, he wrote
AUD/USD down 0.4% to 0.6335.
Australian employment surprisingly dropped in February, sending the currency and government bond yields lower as traders boosted bets on further interest-rate cuts this year
NZD/USD drops 0.5% to 0.5785; NZD was dragged lower by AUD on cross-related flows.
New Zealand’s economy exited recession at the end of 2024, posting stronger-than-expected growth in the fourth quarter.
The Bloomberg Dollar Spot Index is little changed.
US president Donald Trump said the Federal Reserve should cut interest rates, splitting with the US central bank as officials weigh the economic cost of his tariff push.
USD/JPY down 0.2% to 148.44.
“There were some concerns of EM contagion risks after the Turkish lira and the Colombian peso saw sharp sell-off at one point yesterday,” says Christopher Wong, a strategist at Oversea-Chinese Banking Corp. “Slightly thinner market liquidity owing to onshore closure is also another factor that may have exacerbated the yen’s move”.
Note: Japan market closed on the Vernal Equinox Day.
EUR/USD down 0.1% to 1.0893.
Source : Bloomberg
