Pound (GBP) climbs on mixed jobs data
The pound (GBP) strengthened on Thursday, despite a mixed UK jobs report, which showed unemployment rising and wage growth slowing in June.
The focus for GBP investors, however, appeared to be on the revision to May’s payroll figures, which were revised up from -109,000 to -25,000, helping to trim some of the more dovish Bank of England (BoE) rate cut bets.
Sterling may struggle to maintain this momentum today, as a lull in UK data will likely leave the direction of the pound to be determined by wider market trends.
Euro (EUR) undermined by transatlantic trade tensions
The euro (EUR) faced headwinds yesterday amid growing fears that the EU and the US will be unable to reach a trade deal before the 1 August deadline.
EUR investors fear a 30% tariff on all EU exports to the US could severely impact the Eurozone economy and push the European Central Bank (ECB) to provide more support.
Germany’s latest producer price index may act as a headwind for the euro today, as another slide in input prices is likely to weaken consumer inflation expectations and stoke ECB interest rate cut speculation.
US dollar (USD) extends recovery following Fed Powell scare
The US dollar (USD) trended broadly higher yesterday, with the currency continuing to recover after President Donald Trump dismissed a report that he was considering firing Federal Reserve Chair Jerome Powell.
However, the US dollar’s gains were tested later in the session, following dovish remarks from Fed policy makers, including San Francisco Fed President Mary Daly, who suggested two rate cuts this year might be ‘reasonable’.
Looking ahead, the University of Michigan’s latest US consumer sentiment index could help the US dollar end this week on a high, if it reports another improvement in household morale.
Canadian dollar (CAD) buoyed by strengthening oil prices
The Canadian dollar (CAD) edged higher on Thursday, as the commodity-linked currency drew support from rising oil prices.
CAD data is in short supply today, likely leaving the ‘loonie’ to continue to track oil price movements.
Australian dollar (AUD) subdued amid market caution
The Australian dollar (AUD) wavered overnight on Thursday amid a mixed market mood.
New Zealand dollar (NZD) muted in risk-off trade
The New Zealand dollar (NZD) also struggled to find momentum in overnight trade as many investors erred on the side of caution.
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