Pound Sterling
While the Pound initially posted notable declines following the release of below forecast UK inflation data, various industry experts attempted to calm deflation fears and the British currency went on to recoup losses against rivals like the Euro as trading progressed. As influential economic reports for the UK are in short supply for the rest of the week, global economic developments and fluctuations in the commodities market are likely to have the biggest impact on GBP trading.

US Dollar
After Friday’s mixed bag of US employment figures, expectations for a US interest rate hike were pushed back and the ‘Greenback’ came under pressure. However, the US Dollar staged a rebound as a Fed official asserted that the strength of the US economic recovery would warrant borrowing costs being increased in mid 2015. Further currency movement could be occasioned by today’s US Monthly Budget Statement.

Euro
Germany’s Wholesale Price Index registered another month of declines in December, and the report weighed on the Euro during the European session. The common currency was trading in the region of a nine-year low against the US Dollar and was struggling against the Pound even as the UK’s CPI came in below forecasts.

Australian Dollar
During the South Pacific session the Australian Dollar advanced on several of its most traded currency counterparts following the release of stronger-than-anticipated trade data for China. The ‘Aussie’ shed much of its advance however as tumbling commodity prices created a risk-off environment.

New Zealand Dollar
The weakness in the commodities market left the New Zealand Dollar trending 0.2% lower against the Pound and 0.4% lower against the US Dollar. The ‘Kiwi’ failed to benefit from domestic reports showing an in consumer confidence and a rebound in the ANZ Heavy Truckometer.

Canadian Dollar
Like most other commodity currencies, the Canadian Dollar took a hit on Tuesday as it was speculated that the price of crude oil could sink to 40 Dollars a barrel. The ‘Loonie’ is likely to spend the day trending lower against rivals like the ‘Greenback’.