The Pound firmed slightly against the Euro after a European Central Bank (ECB) board warned that falling oil prices could push Eurozone inflation below 0%, raising expectations that the ECB will announce a quantitative easing programme in the New Year. GBP weakened against other peers as UK industrial and manufacturing production data came in below economist forecasts. The currency is likely to experience volatility later in the session when the latest UK trade balance data is released.

US Dollar

The US Dollar recorded gains against major peers such as the Pound and Euro as the currency was boosted by increased demand for safe-haven assets. Slowing economic growth in China and a decline in shares all over the world has bolstered demand for less risky assets. Against the Japanese Yen, the ‘Greenback’ softened to its lowest level in three days.

The Euro

The Euro was weaker against the Pound and other peers after ECB Board member Peter Praet warned that falling oil prices could see inflation in the Eurozone fall into deflation territory. Also weighing on the single currency was more disappointing economic data out of France, which showed that industrial production fell sharply in October.

Australian Dollar

The ‘Aussie’ firmed against the Pound and other peers following the release of domestic economic data. The Australian Bureau of Statistics said that home loans rose 0.3% in October, beating expectations for a 0.2% gain. Home loans dropped by a revised 0.4% in September, down from a previously estimated decline of 0.7%. In a separate report, the Westpac Banking Corporation reported that Australia’s consumer sentiment declined 5.7% this month after a 1.9% rise in November.

New Zealand Dollar

The New Zealand Dollar managed to firm following an earlier decline caused by Fonterra cutting its forecast payout to farmers. The dairy group cut its forecast payout by 60 cents, causing economists to estimate that dairy income will be slashed by more than $6 billion compared to the same period of last year. Economists will now be focusing on tonight’s New Zealand interest rate decision.

Canadian Dollar

The ‘Loonie’ fell again on Wednesday as oil prices resumed their steady decline due to an Iranian official stating that he expects more price declines if there is division among OPEC members. Prices are likely to remain weaker as OPEC and the US refuse to cut supplies.

South African Rand

The Rand weakened against the Pound after data showed that annual inflation in South Africa slowed to its lowest level in ten months in November. According to Statistics South Africa, the consumer price index climbed by 5.8% annually but stagnated on a monthly basis. This was the lowest level of inflation seen since December 2013.