Pound (GBP) puts up a fight following downbeat PMIs
The pound (GBP) was mixed yesterday, although it showed remarkable resilience following some lacklustre PMI surveys.
Although the latest data pointed to an unexpected contraction in the UK’s vital services sector, Sterling was able to rise against weaker rivals and resist notable losses elsewhere.
Looking ahead, GBP investors may focus on UK politics today. Uncertainty over whether the government’s policy direction could change once Prime Minister Keir Starmer is replaced could subdue Sterling.
Euro (EUR) dented by contracting Eurozone activity
The euro (EUR) softened yesterday after the Eurozone’s latest PMI surveys revealed a third consecutive month of contracting private sector activity in June.
EUR was also pressured by its strong negative correlation with the US dollar (USD), as the latter currency strengthened. However, the relatively safe euro fared well against riskier rivals.
Today, the euro could enjoy support if Germany’s latest IFO business climate indicator reveals an improvement in morale this month.
US dollar (USD) climbs amid safe-haven demand
The US dollar marched higher yesterday, striking multi-month highs against some peers, as a deeply risk-averse market mood saw investors seek out the safety of the ‘greenback’.
In addition, stronger-than-forecast US PMI data boosted USD’s appeal, with activity in the manufacturing and services sectors both accelerating in June.
US economic data is in short supply on Wednesday, likely leaving the ‘greenback’ to trade on market risk dynamics. If the mood improves, the US dollar could face pressure.
Canadian dollar (CAD) finds support despite soft oil prices
The Canadian dollar (CAD) wavered higher yesterday, with the crude-linked currency shrugging off softer oil prices and enjoying its positive correlation with the US dollar.
Looking forward, Bank of Canada (BoC) Senior Deputy Governor Carolyn Rogers is due to deliver a speech. Any hawkish remarks following Monday’s hotter-than-forecast inflation figures could underpin the ‘loonie’.
Australian dollar (AUD) weakens as inflation eases
The Australian dollar (AUD) languished last night, following steep losses yesterday, as Australian inflation unexpectedly cooled in May.
New Zealand dollar (NZD) slips amid anxious mood
The New Zealand dollar (NZD) touched multi-month lows overnight, as a risk-off mood continued to grip markets.
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