Pound (GBP) pressured by dovish BoE comments
The pound (GBP) was subdued yesterday, following dovish comments from Bank of England (BoE) Governor Andrew Bailey.
Speaking to The Times, Bailey signalled that more aggressive interest rate cuts may be on the horizon if the UK's labour market continues to weaken.
Turning to today's session, Sterling may see limited movement, as GBP investors brace for high-impact UK economic releases in the second half of the week.
Euro (EUR) undermined by Trump tariff threat
The euro (EUR) struggled to attract support on Monday, in the face of US President Donald Trump's latest tariff threat.
Despite ongoing EU-US trade talks, Trump announced over the weekend his plans to impose a 30% tariff on EU goods from 1 August, raising fresh questions over the future of the transatlantic trade relationship.
Coming up, Germany will publish its latest ZEW economic sentiment index later today. If morale continued to improve this month, it could help revive EUR demand.
US dollar (USD) supported by risk-off flows
The US dollar (USD) strengthened during yesterday's session as a tepid market mood saw investors favour the safe-haven currency.
These gains accelerated as Trump announced he would impose 'very severe' tariffs on Russia if it continues its war with Ukraine, with investors particularly spooked by the secondary tariffs, which would hit any country importing Russian oil.
The latest US consumer price index will be in the spotlight today. June's CPI figures are forecast to report inflation accelerated to a four-month high, likely denting Federal Reserve rate cut expectations and lifting the US dollar.
Canadian dollar (CAD) steady as oil prices firm
The Canadian dollar (CAD) was flat on Monday as an uptick in oil prices helped to offset ongoing concerns over US-Canadian trade talks.
Canada will also publish its latest CPI figures today. Inflation is expected to accelerate for the first time since February but remain below 2%, which may stoke dovish Bank of Canada (BoC) rate cut bets and drag on the 'loonie'.
Australian dollar (AUD) wobbles on mixed Chinese data
The Australian dollar (AUD) wavered overnight on Monday as China reported a smaller-than-expected deceleration in GDP in the second quarter, but much weaker-than-forecast retail sales last month.
New Zealand dollar (NZD) muted amid subdued risk appetite
The New Zealand dollar (NZD) traded sideways in overnight trade as market risk appetite remained fragile, despite China's GDP figures surprising to the upside.
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