Pound (GBP) flat ahead of key data
The pound (GBP) treaded water yesterday, as GBP investors erred on the side of caution ahead of several high-tier UK economic releases later in the week.
Markets are bracing for volatility over the next few days as this data will likely shape expectations for whether or not the Bank of England (BoE) might tighten monetary policy before the end of the year.
The deluge of UK data opens with the publication of June's employment figures, with the pound struggling this morning as unemployment printed above forecast in June.
Euro (EUR) buoyed by USD weakness
The euro (EUR) was underpinned by its strong negative correlation with the US dollar (USD) on Monday.
However, this didn't translate into any significant strength for the euro amid ongoing concerns over the impact of high gas prices on the Eurozone economy.
Germany will publish its latest ZEW economic index today, with the euro potentially gaining if morale in the Eurozone's largest economy improved this month.
US dollar (USD) pressured by dovish Fed bets
The US dollar opened this week's session on the defensive, striking new multi-month lows against many of its peers, amid dovish repricing of Federal Reserve interest rate expectations.
However, the ‘greenback’ was able to claw back the bulk of these losses late on Monday amid a negative shift in market risk appetite.
Expect the US dollar to face fresh pressure today if the latest ADP data reports that the number of jobs added by the US economy continued to decline through the last week of July.
Canadian dollar (CAD) subdued despite rising inflation
The Canadian dollar (CAD) was muted on Monday as a sharper-than-expected rise in Canadian inflation failed to strengthen bets that the Bank of Canada (BoC) might raise interest rates later in the year.
Coming up, movement in the 'loonie' is likely to be tied to oil price dynamics today, potentially lifting CAD if Brent crude pushes back toward $90 per barrel.
Australian dollar (AUD) wobbles as sentiment deteriorates
The Australian dollar (AUD) fluctuated in overnight trade, initially firming amid an unexpected improvement in consumer confidence, before being pressured by a weakening of market risk appetite.
New Zealand dollar (NZD) slides as investors book profits
The New Zealand dollar (NZD) slumped overnight as the downturn in risk appetite triggered some profit-taking in the 'kiwi'.
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