US Dollar struggles have continued through this morning as the ceasefire in The Middle East looks to have eased tensions in the region. Over the weekend and into this week, The US Dollar had been a main beneficiary due in large to its safe-haven status. But over the past few days this has reversed as Trump brought the ceasefire announcement.
Comments from Federal Reserve Chairman Jerome Powell also proved slightly damaging to The Dollar, emphasising for the first time that lower inflation alongside a weakening jobs market could allow for an earlier interest rate cut to be considered. This stance also followed comments made by a number of fellow Fed members, suggesting a growing feeling that The Central Bank could actually afford to cut rates sooner rather than later.
On the other hand, Pound Sterling in particular is benefitting from the market reversals off the back of the ceasefire in The Middle East. This was largely down to a fall in Oil Prices which had dropped by more than 5% yesterday alone, as initial fears that the Strait of Hormuz would no longer be blocked. This key route being blocked would have been extremely damaging for economies globally due to the fact that a fifth of the world’s Oil passes through this key channel.
The Australian Dollars recovery has also been stopped in its tracks after their latest inflation report showed Headline Inflation falling by more than expected. Initial numbers suggested inflation would fall by 0.1% to 2.3%. However, official figures released earlier this morning showed inflation actually dropped to 2.1%. The monthly inflation figures indicate a softer last quarter which can now allow the Reserve Bank of Australia to move towards confidently reducing interest rates further.
GBP/EUR 1.1720 GBP/USD 1.3594 GBP/AED 4.9942
GBP/AUD 2.0935 GBP/CHF 1.0965 GBP/CAD 1.8673
GBP/NZD 2.2598 EUR/USD 1.1587 GBP/ZAR 24.2067