Pound (GBP) uncertain amid lack of data
The pound (GBP) traded in a wide range yesterday, with GBP struggling for direction amid a lack of UK economic data.
Sterling was also uncertain ahead of high-impact events later in the week, including fresh UK data, the Bank of England (BoE) decision, and the Makerfield by-election.
This morning, Sterling stumbled following a softer-than-expected UK consumer price index. Headline inflation held at 2.8%, rather than rising to 3% as forecast, dampening BoE interest rate hike bets.
Euro (EUR) buoyed by strong German economic release
The euro (EUR) firmed against many of its peers yesterday thanks to stronger-than-expected German data.
Germany’s latest ZEW economic sentiment index rose from -10.2 to 10.5, beating forecasts for -6 to show its first positive reading since the outbreak of the US-Iran war in March.
Turning to today, European Central Bank (ECB) President Christine Lagarde is due to deliver a speech. Any hawkish remarks could underpin the euro.
US dollar (USD) softens as market mood improves
The safe-haven US dollar (USD) edged lower yesterday as a cautiously upbeat mood returned to markets, with some shipping activity resuming in the Strait of Hormuz.
However, concerns about the ongoing Israeli offensive in Lebanon limited risk appetite, thereby tempering USD’s losses.
Looking ahead, the latest US retail sales figures could influence the ‘greenback’ today. Another month of robust sales growth could bolster USD. However, movement may be limited ahead of the Federal Reserve rate decision this evening.
Canadian dollar (CAD) pressured by falling oil prices
The commodity-linked Canadian dollar (CAD) slipped yesterday, touching four-month lows against GBP and EUR, as crude prices continued to retreat.
With Canadian economic data thin on the ground today, oil price dynamics may continue to drive CAD. If crude extends its downside, the ‘loonie’ could weaken.
Australian dollar (AUD) edges lower amid RBA bets
The Australian dollar (AUD) trended slightly lower overnight, as markets continued to scale back Reserve Bank of Australia (RBA) rate hike bets following the bank’s most recent meeting.
New Zealand dollar (NZD) falls as consumer confidence declines
The New Zealand dollar (NZD) weakened overnight after New Zealand’s consumer confidence index revealed a larger-than-forecast deterioration in morale in the second quarter.
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