Pound (GBP) pressured by BoE rate decision
The pound (GBP) retreated against most of its peers on Thursday as the Bank of England (BoE) delivered its latest interest rate decision.
In addition to keeping rates on hold, the BoE revised its inflation forecast lower, further tempering expectations for a rate hike later in the year.
The result from the Makerfield by-election will be the primary focus for GBP investors at the end of this week, with Andy Burnham’s convincing victory likely to place more pressure on Prime Minister Keir Starmer to step aside.
Euro (EUR) undermined by USD demand
The euro (EUR) slipped yesterday as it was undermined by its inverse trading relationship with the US dollar (USD).
However, these losses were tempered somewhat by the US-Iran peace agreement and the continued fall in energy prices, which should relieve pressure on Europe amid its dependence on oil and gas imports.
Germany’s latest producer price index looks to drag on the euro today, following a weaker-than-expected acceleration in factory gate prices last month.
US dollar (USD) strengthened by hawkish Fed bets
The US dollar firmed on Thursday as the currency continued to catch bids in the wake of the Federal Reserve’s latest interest rate decision.
USD investors continued to reprice Fed policy expectations following a notably hawkish shift under new Fed Chair Kevin Warsh, with the odds of a rate hike by the end of summer rising to around 70%.
In the absence of any notable US economic indicators, the US dollar may remain on the defensive today amid the optimism surrounding the US-Iran peace agreement.
Canadian dollar (CAD) subdued as oil prices continue to drop
The Canadian dollar (CAD) struggled to attract any meaningful support yesterday as a continued drop in oil prices curbed the appeal of the commodity-linked currency.
Coming up, the ‘loonie’ may face headwinds today if Canada’s latest retail sales figures point to a cooling of consumer spending in May.
Australian dollar (AUD) falters in uneven trade
The Australian dollar (AUD) fell back through Thursday’s Asian trading session as a mixed market mood sapped demand for the risk-sensitive currency.
New Zealand dollar (NZD) slides as sentiment sours
The New Zealand dollar (NZD) also faced resistance in overnight trade amid growing risk aversion.
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