Pound (GBP) bolstered by BoE decision
The pound (GBP) firmed yesterday following the Bank of England’s (BoE) latest interest rate announcement.
As expected, the BoE left rates unchanged, but Governor Andrew Bailey appeared to push back on market expectations for a cut in August, offering Sterling some support.
Looking ahead, Sterling may struggle for traction after a sharp drop in UK retail sales. Data published this morning showed a 2.7% slump in May – far worse than the expected 0.5% decline – which could weigh on GBP sentiment.
Euro (EUR) drifts amid market caution
The euro (EUR) traded mixed on Thursday, with a lack of notable Eurozone data leaving the currency at the mercy of broader market dynamics.
A cautious tone across markets offered the safe-haven euro some support against riskier currencies, but EUR struggled to maintain gains elsewhere.
Looking to today, weakness in German producer price data could pressure the euro further, as it may reinforce expectations for more interest rate cuts from the European Central Bank (ECB).
US dollar (USD) retreats after midweek gains
The US dollar (USD) trimmed some of its recent gains yesterday, following Wednesday’s post-Federal Reserve decision rally.
Reports suggesting the US might launch a strike against Iran triggered investor anxiety, with fears of deeper US involvement in Middle East tensions denting demand for the US dollar.
With no major US data releases scheduled for today, the ‘greenback’ is likely to remain sensitive to risk sentiment and geopolitical developments.
Canadian dollar (CAD) ignores oil price gains
Despite a rise in oil prices, the commodity-linked Canadian dollar (CAD) lost ground on Thursday, slipping against most major peers.
Looking ahead, the ‘loonie’ could find some support if Canadian retail sales data impresses. Analysts expect sales growth to remain in positive territory for May.
Australian dollar (AUD) treads water in cautious trade
The Australian dollar (AUD) lacked direction overnight. A nervous market mood limited risk appetite and weighed on the ‘Aussie’, although softness in the US dollar helped offset losses.
New Zealand dollar (NZD) muted amid uncertainty
Similarly, the New Zealand dollar (NZD) traded in a narrow range overnight, with ongoing market caution keeping the currency largely rangebound.
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