Pound (GBP) marches higher amid interest rate speculation
The pound (GBP) initially wobbled yesterday as a lack of UK economic data left Sterling vulnerable to volatility.
However, GBP managed to rally in the afternoon, thanks to ongoing optimism around the UK government leadership transition and an uptick in Bank of England (BoE) interest rate hike bets.
Today, nominations open for the Labour leadership contest. If frontrunner Andy Burnham looks set to remain unopposed, Sterling may draw support.
Euro (EUR) unsure in absence of data
The euro (EUR) faced choppy movement yesterday as a lack of Eurozone data left the currency without a clear directional bias.
This saw EUR exchange rates trade in a wide range, as broader market volatility triggered some unpredictable movement in EUR.
The European Central Bank’s (ECB) latest policy meeting minutes are due out this afternoon. Any hints that policymakers are open to further rate hikes could support the euro.
US dollar (USD) volatile despite risk aversion
The US dollar (USD) traded erratically yesterday, as escalating US-Iran tensions failed to provide the safe-haven currency with sustained support.
The Federal Reserve’s meeting minutes in the evening also left USD rudderless, as the central bank adopted a neutral wait-and-see approach.
Turning to today, an expected rise in US jobless claims could dent the US dollar this afternoon. Meanwhile, Middle East tensions could underpin the ‘greenback’, if the market mood remains downbeat.
Canadian dollar (CAD) climbs as oil continues to rise
The commodity-linked Canadian dollar (CAD) was one of yesterday’s clear winners, as a 7% jump in crude prices boosted the currency.
Oil price dynamics are likely to continue driving CAD today, with the ‘loonie’ poised to strengthen further if crude rises amid escalating tensions in the Middle East.
Australian dollar (AUD) rangebound despite Middle East escalation
The Australian dollar (AUD) wavered sideways overnight as market sentiment remained mixed, with risk appetite showing surprising resilience despite fresh US strikes on Iranian targets.
New Zealand dollar (NZD) jumps as PMI smashes forecasts
The New Zealand dollar (NZD) extended its recent rally yesterday after the latest manufacturing PMI smashed forecasts, surging to 59.7 in June – its highest score since July 2021.
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