Pound (GBP) firms despite lack of data
The pound (GBP) ticked higher yesterday, with the UK currency attracting support despite a lack of domestic economic data.
Sterling may have been supported by Bank of England (BoE) interest rate expectations, as a rise in oil prices increased the likelihood of an interest rate hike from the bank.
Turning to today, British economic data remains thin on the ground. As a result, Sterling may struggle to find a clear direction.
Euro (EUR) mixed as ECB decision looms
The euro (EUR) traded without a clear trajectory yesterday amid a lack of Eurozone economic data.
EUR movement was also uncertain as investors avoided taking strong positions ahead of today’s European Central Bank (ECB) rate decision.
The common currency could firm today if the ECB raises interest rates as expected. However, the focus will likely be on the bank’s forward guidance. Could a hawkish tone see EUR march higher?
US dollar (USD) uncertain despite rising inflation
The US dollar (USD) struggled yesterday, with the currency unable to capitalise on the risk-off market mood or an uptick in US inflation.
While the latest consumer price index saw headline inflation jump from 3.8% to 4.2% in May, core inflation only edged up from 2.8% to 2.9%. This failed to boost Federal Reserve rate hike bets, leaving USD lacking support.
Middle East news may be the focus for USD investors today. The ‘greenback’ could strengthen if ongoing anxiety about escalating tensions dampens market risk appetite.
Canadian dollar (CAD) underpinned by rising oil prices
The crude-linked Canadian dollar (CAD) gained ground yesterday amid rising oil prices, although CAD trimmed its gains after the Bank of Canada (BoC) struck a balanced tone following its latest interest rate decision.
Oil prices could influence the ‘loonie’ today. Expect to see CAD trend higher if renewed fighting in the Middle East prompts crude prices to climb.
Australian dollar (AUD) hits multi-month lows amid risk-off mood
The Australian dollar (AUD) touched fresh multi-month lows overnight amid a surprise drop in Australian consumer inflation expectations and a risk-off market mood.
New Zealand dollar (NZD) weakens in cautious trade
The New Zealand dollar (NZD) trended broadly lower last night as geopolitical uncertainty continued to weigh on market risk appetite.
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