Pound (GBP) sidelined by lull in data
The pound (GBP) traded without a strong direction bias on Wednesday, in the absence of any notable UK economic data.
GBP investors were instead left to mull over remarks made by Bank of England (BoE) policymakers earlier in the week, which offered a mixed outlook on monetary policy.
BoE Governor Andrew Bailey is scheduled to speak again later today. His remarks may underpin Sterling sentiment today, if he continues to downplay the chances of an August interest rate cut.
Euro (EUR) subdued amid fresh EU-US trade jitters
The euro (EUR) was muted through yesterday’s session amid fresh concerns over transatlantic trade tensions.
These jitters followed the news that even at 10%, the EU sees US President Donald Trump’s tariffs as grounds to retaliate with its own measures.
EUR investors will look to a speech by European Central Bank (ECB) Vice-President Luis de Guindos for fresh impetus today. A hawkish tilt from de Guindos may further dampen bets for a July rate cut and help to buoy the euro.
US dollar (USD) slides on Fed uncertainty
The US dollar (USD) initially traded sideways yesterday as safe-haven flows continued to recede, with the fragile ceasefire between Israel and Iran appearing to hold.
USD exchange rates then retreated on the news that US President Donald Trump is considering naming the next Chair of the Federal Reserve early, with markets speculating that Trump will seek to pick someone who is more supportive of his own views on monetary policy.
Barring a revision to the finalised first-quarter GDP figures, the primary catalyst for movement for the US dollar today will be the release of the latest US durable goods orders data. An expected rebound in order growth could help the ‘greenback’ claw back some of its recent losses.
Canadian dollar (CAD) steadies amid modest oil price recovery
The Canadian dollar (CAD) found its feet again on Wednesday, with a rebound in oil prices helping the commodity-linked currency stabilise following its dramatic losses in the first half of the week.
Movement in the ‘loonie’ is likely to remain tied to oil price dynamics today. A continued recovery could help revive CAD demand.
Australian dollar (AUD) buoyed by improving risk appetite
The Australian dollar (AUD) firmed overnight on Wednesday, with easing tensions in the Middle East helping to bolster market risk appetite.
New Zealand dollar (NZD) lifted by risk-on flows
The New Zealand dollar (NZD) also appreciated in overnight trade amid the increasingly optimistic market mood.
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