Pound (GBP) muted ahead of BoE rate decision
The pound (GBP) lacked direction in midweek trade as GBP investors focused on the Bank of England's (BoE) impending interest rate decision.
While a 25bps rate cut is all but baked in, markets will be looking for more guidance on how the bank will shape monetary policy through the remainder of 2025.
If the outlook for the UK labour market remains a key concern, it may push the BoE to adopt a more dovish approach to monetary policy and pull the pound lower today.
Euro (EUR) gains capped by disappointing data
The euro (EUR) trended broadly higher on Wednesday, thanks to the single currency's negative correlation with the US dollar (USD).
However, these gains were limited in the face of lacklustre EUR data, as German factory orders and Eurozone retail sales fell short of expectations in June.
Germany's latest industrial production data may also exert pressure on the euro today, after a larger-than-expected contraction in factory output in June.
US dollar (USD) pressured by US economic jitters
The US dollar trended lower yesterday, amid mounting concern over the economic trajectory of the US.
Adding to the pressure on the 'greenback' were reports that US President Donald Trump is preparing to announce his nominee for the next Chair of the Federal Reserve, and the uncertainty this casts over future US central bank monetary policy.
Last week's initial jobless claims will be in focus for USD investors today. Any additional signs of slack in the US labour market are likely to stoke Fed rate cut bets and weigh on the US dollar.
Canadian dollar (CAD) steady as oil prices rebound
The Canadian dollar (CAD) held its ground on Wednesday as rallying oil prices helped to offset Canadian tariff woes.
Canada's latest Ivey PMI could provide a boost for the 'loonie' in today's session, if it reports that the pace of growth in the private sector accelerated again in July.
Australian dollar (AUD) firms as trade figures impress
The Australian dollar (AUD) strengthened overnight on Wednesday in response to stronger-than-expected Australian trade figures, with a welcome rebound in exports propelling the nation's trade surplus to a three-month high in June.
New Zealand dollar (NZD) buoyed by risk-on trade
The New Zealand dollar (NZD) also firmed in overnight trade as positive risk appetite helped boost the appeal of the ‘kiwi’.
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