Pound (GBP) weakens amid cost-of-living concerns
The pound (GBP) fell yesterday as the Confederation of British Industry’s (CBI) distributive trades survey came in far worse than forecast.
In addition, concerns about the rising cost of living in the UK unnerved GBP investors, as higher energy costs could hit household spending and drag on the British economy.
Market-moving UK data is in short supply during today’s session. As a result, Sterling may move without a clear directional bias.
Euro (EUR) uncertain despite hawkish ECB remarks
The euro (EUR) was mixed yesterday, rising against weaker rivals but losing ground to stronger peers.
Remarks from European Central Bank (ECB) policymaker Isabel Schnabel lent EUR some support, after she suggested the bank needs to raise interest rates further.
Looking forward, the ECB’s July meeting minutes are due today. If they reinforce Schnabel’s argument that additional rate hikes are needed, the euro could gain ground.
US dollar (USD) boosted by stubborn inflation
The US dollar (USD) leapt yesterday following the latest US core PCE price index.
The Federal Reserve’s preferred measure of inflation showed that price growth remained well above the central bank’s target in July, fuelling bets on an interest rate hike this year.
Turning to today, the US dollar may be muted as investors await Fed Chair Kevin Warsh’s keynote speech at the Jackson Hole symposium and the US non-farm payrolls annual revision. Both the speech and the payrolls data are due tomorrow.
Canadian dollar (CAD) undermined by ongoing trade fears
The Canadian dollar (CAD) slipped against its stronger peers yesterday as CAD investors remained concerned about the impact of a trade war with the US.
The ‘loonie’ could face headwinds today if trade tensions continue to pressure the currency. Oil price dynamics could also influence the crude-linked Canadian dollar.
Australian dollar (AUD) remains buoyed by RBA bets
The Australian dollar (AUD) ticked higher overnight, as an improving market mood and Reserve Bank of Australia (RBA) rate hike bets underpinned the ‘Aussie’.
New Zealand dollar (NZD) struggles to hold risk-inspired gains
The New Zealand dollar (NZD) initially ticked up during the Asian trading session amid an improving market mood, before relinquishing its gains.
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