GBP/USD Plunges After Fed Rate Hold
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GBP/USD dropped to 1.2972 as the greenback weakened following the Federal Reserve's decision to keep rates unchanged and reaffirm its outlook for two rate cuts later this year. The Fed highlighted solid labour market conditions but noted inflation remains "somewhat" elevated. The US dollar was further pressured by uncertainty around President Trump's tariff policies, which are expected to slow growth and raise inflation. Meanwhile, UK data showed steady unemployment but a rise in benefit claims and wage growth, failing to support sterling. Investors are now focused on the Bank of England's (BoE) interest rate decision, with the BoE expected to maintain rates amidst mixed UK economic signals. In today's session, the BoE's interest rate decision and BoE Governor Andrew Bailey's speech will drive the GBP/USD exchange rate.
AUD/JPY Declines Following Disappointing Australia Employment Data
AUD/JPY fell to 93.76 as the Australian Dollar (AUD) faced pressure following disappointing February employment data, which revealed a loss of 52.8K jobs. The unemployment rate held steady at 4.1%, but the decline in full-time and part-time employment raised concerns about the labour market. The Australian dollar also faced volatility from the People's Bank of China's (PBOC) decision to keep its Loan Prime Rates steady. Meanwhile, the Japanese Yen gained due to risk-off sentiment and expectations of a potential Bank of Japan (BoJ) rate hike. Investors will focus on global economic factors and market reactions to the Australian employment data for the next move in AUD/JPY.
NZD/USD Subdued Despite Upbeat New Zealand GDP Report
NZD/USD struggled around 0.5755 as the New Zealand dollar remained under pressure despite stronger-than-expected Q4 GDP data showing growth of 0.7%. The NZD was weighed down by weakening consumer confidence, with Westpac's Q1 survey showing a drop to 89.2. This reflects growing concerns over trade tensions and cost-of-living pressures, while market expectations of further rate cuts by the Reserve Bank of New Zealand (RBNZ) add further downside pressure. Positive data from China, New Zealand's key trading partner, helped support the Kiwi, but it remains vulnerable to global risks. New Zealand's growth figures, along with tomorrow's trade balance data and key US labour market statistics, will influence the movements of the NZD/USD.
EUR/USD Sinks Following ECB's Lagarde Speech
EUR/USD dropped to 1.0847 after ECB President Christine Lagarde warned of potential economic risks related to US tariffs. Lagarde indicated that US tariffs on European imports could reduce Eurozone growth by about 0.3% in the first year. The euro also faced downward pressure from the ECB's concerns about inflation, though the impact is expected to be temporary. On the data front, Eurozone CPI eased to 2.3% YoY in February, while Germany's ZEW Economic Sentiment Index surged. Despite this, the euro faced challenges from the global trade backdrop. The Federal Reserve's cautious stance on rate cuts and revision of its growth forecasts further undermined the greenback. Today, market sentiment surrounding Lagarde's speech and the US-Russia Ukraine peace talks will influence EUR/USD.
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