Pound (GBP) choppy amid ongoing data drought
The pound (GBP) lacked a clear direction yesterday as British economic data remained thin on the ground.
This left Sterling to trade in a wide range, with GBP also exposed to market turbulence.
Sterling may remain mixed today as the recent UK data drought continues, with GBP investors potentially hesitant to place bets ahead of tomorrow’s GDP figures.
Euro (EUR) boosted by softer USD
The euro (EUR) ticked higher yesterday, with EUR seemingly drawing support from its strong negative correlation with the softening US dollar (USD).
However, the looming European Central Bank (ECB) interest rate decision – which will be announced today – limited the single currency’s movement.
With a quarter-point rate hike fully priced in, the ECB’s forward guidance will be the focus for EUR investors today. While markets expect a hawkish tone, this means the euro could fall if the bank sounds more dovish than anticipated.
US dollar (USD) struggles despite risk aversion
The US dollar was subdued yesterday as a risk-off market mood failed to provide USD with much safe-haven support.
The downside came amid a range of wider economic and technical factors, including the US-Iran war, trade tensions with Canada and the strength of the Japanese yen (JPY).
Looking ahead, the latest US producer price index is scheduled for release today. A rise in producer prices in August could support USD, although gains may be limited ahead of tomorrow’s more impactful inflation data.
Canadian dollar (CAD) slides as trade war escalates
The crude-linked Canadian dollar (CAD) fell yesterday, despite stronger oil prices, as the US escalated its trade war with Canada by banning certain Canadian goods.
Commodity markets and trade tensions could continue driving CAD exchange rates today. While higher crude prices could support the ‘loonie’, the intensifying trade war may pressure the currency.
Australian dollar (AUD) dented by softer inflation expectations
The Australian dollar (AUD) was muted overnight as Australia’s latest consumer inflation expectations data missed forecasts.
New Zealand dollar (NZD) edges up despite lack of data
The New Zealand dollar (NZD) attracted some dip-buying overnight, helping it crawl up from yesterday’s one-week lows.
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