Pound (GBP) tempered by Burnham fiscal uncertainty
The pound (GBP) held in a narrow range yesterday amid ongoing speculation over the UK’s leadership transition.
While Keir Starmer’s likely successor, Andy Burnham, has been keen to burnish his fiscal credentials, uncertainty over his pick for Chancellor continues to temper Sterling sentiment.
Looking ahead, UK political and fiscal uncertainty will likely continue to suppress GBP demand through the end of the week.
Euro (EUR) pressured by weaker-than-expected German data
The euro (EUR) remained on the back foot on Thursday, following Germany’s latest consumer confidence index.
While consumer sentiment going into July showed some improvement from June, it still fell short of forecasts.
In the absence of any notable Eurozone economic indicators, the euro is likely to trade without strong directional bias today.
US dollar (USD) choppy as US GDP outpaces forecasts
Trade in the US dollar (USD) was a little erratic yesterday, with the currency’s initial gains being reversed through the European session, before USD rebounded on the back of upbeat data.
An upwardly revised GDP print, coupled with a rise in US inflation, arrested the pullback in the ‘greenback’ at the start of the US session as it reinforced Federal Reserve interest rate hike bets.
Barring a revision to US consumer sentiment this month, movement in the US dollar is likely to be driven by wider market trends today, with an attack on a ship in the Strait of Hormuz potentially triggering fresh safe-haven demand.
Canadian dollar (CAD) pressured by soft oil prices
The Canadian dollar (CAD) ticked lower on Thursday as the appeal of the commodity-linked currency was undermined by the ongoing fall in oil prices.
Expect the ‘loonie’ to remain on the defensive today if the oil price slump persists into the weekend.
Australian dollar (AUD) slides in risk-averse trade
The Australian dollar (AUD) weakened overnight on Thursday, after the UN paused its evacuation of ships in the Strait of Hormuz following an attack on a cargo vessel.
New Zealand dollar (NZD) softens amid market caution
The New Zealand dollar (NZD) also stumbled in overnight trade as risk appetite was undermined by the attack in the Strait of Hormuz.
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