Pound (GBP) uncertain in absence of data
The pound (GBP) moved without a clear directional bias yesterday amid an ongoing lack of UK economic releases.
This left the increasingly risk-sensitive currency to trade on market risk dynamics, with Sterling attracting support against some peers while losing ground elsewhere.
Sterling may trade without a clear trajectory once again today, as British economic data remains thin ahead of tomorrow’s GDP release.
Euro (EUR) remains pressured by French politics
The euro (EUR) continued to weaken yesterday amid the political uncertainty in France, following the resignation of French Prime Minister François Bayrou on Tuesday.
A risk-on market mood also placed pressure on the safer single currency, seeing it lose out to its riskier rivals.
Today, the spotlight falls on the European Central Bank’s (ECB) interest rate decision. If ECB President Christine Lagarde suggests that the recent rate-cutting cycle has come to an end, EUR could strengthen.
US dollar (USD) stumbles as producer prices fall
The US dollar (USD) weakened yesterday as a broadly risk-on market mood dampened demand for the safe-haven currency.
A shock decline in producer price inflation also weighed on USD, although the ‘greenback’ was able to avoid steeper losses as hesitation ahead of today’s consumer price index muted movement.
For USD investors, the CPI takes centre stage today. With American inflation expected to have ticked higher last month, the ‘greenback’ could climb as traders trim bets on Federal Reserve rate cuts.
Canadian dollar (CAD) softens despite uptick in oil
The crude-linked Canadian dollar (CAD) traded with modest losses against many of its peers yesterday, with a small rise in oil prices failing to offset CAD’s positive correlation with USD.
With Canadian economic data still in short supply today, CAD could continue taking its cues from USD and oil price movements.
Australian dollar (AUD) pulls back as sentiment sours
The Australian dollar (AUD) softened overnight, retreating from multi-week highs, as a souring market mood and some profit-taking both dragged on AUD.
New Zealand dollar (NZD) slips amid risk-off mood
The New Zealand dollar (NZD) also trended lower overnight amid a fading appetite for riskier assets.
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