Pound (GBP) slips as PMIs disappoint
The pound (GBP) fell yesterday after the UK’s latest PMI results showed an unexpected slowdown in service sector activity.
GBP investors also picked up on the fact that job losses in the services sector accelerated this month, which boosted bets on more Bank of England (BoE) interest rate cuts.
Today could be another difficult session for the pound following disappointing UK retail sales figures. Sales growth rebounded in June but printed below forecasts, while May’s data was revised to show a slightly bigger slump in sales.
Euro (EUR) recovers following ECB rate decision
The euro (EUR) initially weakened yesterday, with a risk-on mood offsetting better-than-expected PMI results.
However, EUR rebounded after the European Central Bank (ECB) left interest rates unchanged and ECB President Christine Lagarde struck a fairly hawkish tone in her subsequent press conference.
Germany’s latest business climate index could support EUR today, with economists expecting the index to hit its highest level since April 2024.
US dollar (USD) muted amid risk-positive trade
The US dollar (USD) was subdued yesterday, as a broadly risk-on market mood sapped the safe-haven currency’s appeal.
The ‘greenback’ attempted to recover during the European trading hours as risk sentiment weakened and the latest S&P services PMI smashed forecasts, but the currency found itself muted.
Turning to today, the latest US durable goods orders data could weigh on the ‘greenback’. Forecasters expect to see a 10.8% decline in order growth last month.
Canadian dollar (CAD) mixed despite rising oil and strong sales figures
The crude-linked Canadian dollar (CAD) was mixed yesterday, rising against weaker rivals but struggling elsewhere despite an uptick in oil prices and a strong rise in Canadian retail sales in June.
Looking ahead, oil price dynamics and US-Canada trade tensions could drive CAD movement today.
Australian dollar (AUD) weakens as risk appetite fades
The Australian dollar (AUD) softened in overnight trade as a souring market mood pressured the currency.
New Zealand dollar (NZD) undermined by souring mood
The New Zealand dollar (NZD) also trended lower overnight amid a fading appetite for risk.
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