Pound (GBP) flat amid rising UK borrowing costs
The pound (GBP) was broadly rangebound yesterday amid fresh concern over the UK bond market.
10-year gilt yields climbed to around 5.1% on Thursday, striking their highest level in over two months amid concern over the government's commitment to its own fiscal rules as Andy Burnham announced a new tax-relief package for pubs.
Meanwhile, the pound is off to a positive start today in response to upbeat UK retail sales. However, this support could be quickly eroded if the UK's upcoming services PMI disappoints.
Euro (EUR) rangebound as ECB leaves rates on hold
The euro (EUR) traded sideways on Thursday after the European Central Bank (ECB) left interest rates on hold at 2.25%, in line with consensus forecasts.
Speaking following the decision, ECB President Christine Lagarde highlighted that persistent energy cost pressures will likely keep Eurozone inflation above the bank’s target into early 2027, but tempered bets for further tightening by pointing out growing threats to economic growth.
Turning to today's session, the euro may be able to break out of confinement if July's preliminary PMIs signal an uptick in Eurozone private sector activity.
US dollar (USD) jumps as Houthis strike tankers in the Red Sea
The US dollar (USD) strengthened against the majority of its peers yesterday amid a worrying spike in global energy prices as Houthi rebels in Yemen expanded the Middle East conflict to the Red Sea.
Aiding USD's ascent was data showing that US jobless claims fell to an almost 60-year low last week.
US President Donald Trump's announcement of a new wave of tariffs looks to have robbed the US dollar of its bullish momentum this morning as trade uncertainty takes some of the shine off the currency.
Canadian dollar (CAD) bolstered by oil price surge
The Canadian dollar (CAD) enjoyed strong support on Thursday as global oil prices surged just shy of $100 per barrel, allowing the commodity-linked currency to shrug off a slowdown in domestic retail sales last month.
Coming up, the 'loonie' looks well positioned to extend its gains today if oil prices continue to appreciate.
Australian dollar (AUD) buoyed by upbeat PMIs
The Australian dollar (AUD) appreciated overnight on Thursday as Australia's latest PMIs pointed to a stronger-than-expected uptick in private sector activity this month.
New Zealand dollar (NZD) rangebound in cautious trade
The New Zealand dollar (NZD) was trapped in a narrow range in overnight trade as Trump's latest tariff announcement sapped market risk sentiment.
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