Pound (GBP) firms against safer currencies
The pound (GBP) strengthened against its safer rivals yesterday thanks to Sterling’s increasingly risk-sensitive nature, with markets cheered by the Israel-Iran ceasefire agreement.
GBP was also supported by hawkish comments from Bank of England (BoE) policymaker Megan Greene, who warned that inflation risks are tilted to the upside.
UK economic data is in short supply today, which could mean GBP exchange rates trade without a clear direction.
Euro (EUR) slips despite upbeat German data
The euro (EUR) fell yesterday, despite Germany’s latest business climate indicator printing above forecasts and rising to its highest level in over a year.
The safer single currency’s downside came amid an improving market mood, which saw investors favour riskier assets.
With Eurozone data thin on the ground today, market sentiment may continue to influence EUR exchange rates. Will persistent risk flows see the euro struggle?
US dollar (USD) slips as safe-haven flows dry up
The US dollar (USD) weakened yesterday as a risk-on rally saw investors abandon the safe-haven ‘greenback’.
Expected remarks from Federal Reserve Chair Jerome Powell limited further losses for USD in the afternoon, as his prepared testimony to Congress showed he would continue to push back on Donald Trump’s calls for an interest rate cut.
Risk appetite and Fed comments could determine the US dollar’s direction once again today, with Powell due to continue his testimony.
Canadian dollar (CAD) slumps as oil prices plummet
The crude-linked Canadian dollar (CAD) extended its downside yesterday, striking multi-month lows against GBP and EUR, as oil prices rapidly retreated following the news of a ceasefire in the Middle East.
Crude prices may continue to be the primary factor influencing the Canadian dollar today, with CAD poised for further losses if oil prices extend their decline.
Australian dollar (AUD) dampened by easing inflation
The Australian dollar (AUD) was muted overnight after Australian inflation cooled more than expected in May, although a risk-on mood spared AUD from losses.
New Zealand dollar (NZD) rises amid strong risk appetite
The New Zealand dollar (NZD) ticked higher last night, with better-than-forecast trade figures and a cheery mood both supporting the ‘kiwi’.
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