Loonie under pressure as oil prices fall

Key Movers

The US dollar has gained some traction early today and continues to trade in the green zone for now with the US dollar Index (DXY) trading at the 104.16 levels. Amid a slew of data releases, the US economy displayed small hints of cooling inflation and a slowing labor market, which has led to a positive response from market players. Consumer inflation expectation data from the University of Michigan showed a steady 3.2% anticipation rate for sticky inflation above the 2% target. In other data, Durable Goods Orders went from a revised 4.6% to -5.4%. Durable Goods Orders without Transportation went from a revised 0.5% to 0%. Initial Jobless Claims for last week went from 233,000 to 209,000 and continuing Jobless Claims declined and from 1,8620,000 to 1,840,000. The 10-year benchmark US Treasury yield traded at 4.38%, near new lows for the week.

The EUR/USD slipped in a see-saw pattern and is back trading at the 1.0865 levels from 1.0900. European Central Bank (ECB) President Christine Lagarde's hawkish statements overnight provided some support for the EUR/USD. President Lagarde stated at a Berlin event that it is too early to declare victory over inflation and that bets based on short-term data flow are premature. In addition, ECB Vice President Luis de Guindos said on Wednesday that the “central bank will not prejudge further movements in the policy rate.” These comments didn’t have much of an impact on the EUR/USD pair’s performance.

The GBP/USD pair paused its 11-week uptrend and three-day winning streak to trade at the 1.2520 levels. The Bank of England’s (BoE) Governor Andrew Bailey toned down the rumors around loosening policies by June 2024 and emphasized that the BoE may maintain higher rates for an extended period. British Prime Minister Rishi Sunak announced that the government intends to lower taxes in response to a drop in inflation, this statement came ahead of the UK's budget announcement.