Pound (GBP) appreciates as UK unveils new industrial strategy
The pound (GBP) trended broadly higher yesterday amid a cautiously optimistic response to the UK’s new industrial strategy.
It’s hoped that a range of new policy measures, including lower energy prices and new skills training, will help to accelerate growth in several key sectors.
GBP investors will look to Bank of England (BoE) Governor Andrew Bailey’s speech today for fresh impetus. If he continues to downplay a potential August interest rate cut, it may help extend Sterling’s upside potential.
Euro (EUR) pressured by disappointing Eurozone PMIs
The euro (EUR) struggled on Monday as the Eurozone’s latest PMIs fell short of expectations.
Growth in the bloc’s private sector as a whole remained anaemic this month, only barely avoiding contraction.
Germany will publish its latest IFO business climate index today, with the euro likely to catch bids if morale continues to improve this month.
US dollar (USD) fluctuates amid Middle East uncertainty
The US dollar (USD) opened this week on firm footing as US strikes on Iranian nuclear sites over the weekend triggered a flight to safety.
However, these gains were unwound by the end of Monday’s session amid hopes a diplomatic solution to the crisis could still be found.
The announcement of a US-brokered ceasefire between Israel and Iran sees the US dollar open today’s session on the defensive. Still, these losses could be reversed later in the session if Federal Reserve Chair Jerome Powell strikes a hawkish tone as he is grilled by Congress later this afternoon.
Canadian dollar (CAD) wavers amid oil price volatility
Trade in the Canadian dollar (CAD) was also choppy on Monday amid some sharp swings in oil prices.
Coming up, Canada will publish its latest consumer price index later today. If inflation remained weak last month, it’s likely to stoke Bank of Canada (BoC) rate cut bets and drag on the ‘loonie’.
Australian dollar (AUD) rallies on ceasefire news
The Australian dollar (AUD) appreciated sharply in overnight trade as US President Donald Trump’s announcement of an Israel-Iran ceasefire deal triggered a significant market rally.
New Zealand dollar (NZD) strengthened by risk-on flows
The New Zealand dollar (NZD) also jumped overnight on Monday as positive news out of the Middle East bolstered market risk appetite.
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