Pound (GBP) struggles to hold post-inflation gains
The pound (GBP) found support at the start of yesterday’s session as hotter-than-forecast UK inflation dampened Bank of England (BoE) interest rate cut bets.
However, Sterling struggled to hold on to these gains as the session progressed amid growing fears that higher borrowing costs could convince the government to raise taxes in the autumn.
Turning to today, new figures show the UK government borrowed less than expected last month. If this is paired with a continued expansion in British service sector activity when the PMIs are published later this morning, GBP could attract support.
Euro (EUR) firms amid Ukraine peace hopes
The euro (EUR) rose yesterday as renewed optimism over the possibility of a peace deal between Russia and Ukraine boosted the single currency.
Hopes for peace were bolstered by US President Donald Trump’s suggestion that the US could provide air support as part of the peace agreement.
The Eurozone’s PMIs showed an overall improvement in private sector activity this month, thanks to an unexpected expansion in the manufacturing sector. This could support EUR as the session unfolds.
US dollar (USD) undermined by Fed concerns
The US dollar (USD) wavered yesterday as the market mood was mixed. Ukraine peace hopes initially weighed on the safe-haven ‘greenback’, although risk appetite softened as the session unfolded.
USD movement was also muted by Federal Reserve jitters ahead of the central bank’s policy meeting minutes and amid fresh criticism of the Fed from President Trump.
The ‘greenback’ may be subdued today as the Federal Reserve’s annual Jackson Hole Symposium gets underway. That said, the latest S&P Global PMIs and initial jobless claims figure could impact USD exchange rates.
Canadian dollar (CAD) buoyed by rising oil prices
The crude-linked Canadian dollar (CAD) climbed yesterday as rising oil prices lifted the ‘loonie’.
Amid a lack of Canadian economic data today, CAD could remain driven by oil price dynamics. Will an ongoing recovery in crude prices see the Canadian dollar gain further ground?
Australian dollar (AUD) subdued despite strong PMIs
The Australian dollar (AUD) softened overnight, despite stronger-than-expected Australian PMIs, as a cautious mood dampened the risk-sensitive currency’s appeal.
New Zealand dollar (NZD) dented by trade deficit
The New Zealand dollar (NZD) also dipped during last night’s Asian session after New Zealand’s balance of trade figures showed an unexpected deficit in July.
Never miss a movement. Create a free account with Currencies Direct to get the latest currency news delivered straight to your inbox. You can also set up rate alerts and check live rates 24/7.
