Pound (GBP) rallies as markets reprice future BoE rate cuts
The pound (GBP) surged yesterday after the Bank of England (BoE) narrowly voted to cut interest rates by 25bps.
The decision was surprisingly close, with four of the nine members of the Monetary Policy Committee voting to leave interest rates unchanged. The bank also upwardly revised its inflation forecast, leading to a pullback in BoE rate cut bets.
Turning to today, Sterling could continue to draw support from the BoE decision. However, a lack of UK data could limit movement.
Euro (EUR) slides on worrying German data
The euro (EUR) fell sharply yesterday after German industrial production slumped by 1.9% in June, versus forecasts for a 0.5% decline.
Following Wednesday’s unexpected 1% contraction in factory orders, the latest data fuelled concerns about the health of the Eurozone’s largest economy.
With little Eurozone data due to be released today, the euro could end the week with muted movement.
US dollar (USD) uncertain as jobless claims rise
The US dollar (USD) was mixed yesterday with the safe-haven ‘greenback’ trading in a wide range despite a risk-on mood and rising US jobless claims.
These headwinds were offset by news that Apple was investing an additional $100bn in the US over the next four years in order to avoid tariffs.
US economic data is in short supply today, potentially leaving the ‘greenback’ to trade on wider market trends. Could a risk-on mood and concerns about US economic policy see USD struggle?
Canadian dollar (CAD) slips in tandem with oil
The crude-linked Canadian dollar (CAD) fell against many of its peers yesterday amid a decline in oil prices and US tariff concerns, although a stronger-than-expected Ivey PMI may have cushioned the downside.
Looking forward, Canada’s jobs report for July is the focus for CAD investors today. An expected rise in unemployment could weigh on the ‘loonie’.
Australian dollar (AUD) buoyed despite risk-off mood
The Australian dollar (AUD) ticked slightly higher overnight, despite a fading appetite for risk, thanks to a rise in commodity prices.
New Zealand dollar (NZD) muted as sentiment sours
The New Zealand dollar (NZD) was subdued overnight as the souring market mood muted the risk-sensitive ‘kiwi’.
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