Pound (GBP) firms despite lukewarm BoE remarks
The pound (GBP) enjoyed modest support yesterday, although GBP’s upside seemed more linked to movements in other currencies than Sterling’s own strength.
Investors largely brushed off comments from Bank of England (BoE) Governor Andrew Bailey. While the BoE chief maintained a cautious stance on rate hikes, he also said that cuts were ‘off the table’ and hinted that the rise in energy prices earlier in the year could have a delayed impact on inflation.
Sterling could struggle for a clear direction during today’s session, with UK economic data thin on the ground.
Euro (EUR) falls following cooler inflation figures
The euro (EUR) fell during yesterday’s session as the Eurozone’s latest consumer price index dampened European Central Bank (ECB) rate hike bets.
The preliminary CPI figures for June showed headline inflation cooling more than forecast, from 3.2% to 2.8%, while core inflation unexpectedly eased from 2.6% to 2.4%.
The Eurozone’s latest jobs data could lend EUR modest support later this morning, if it shows that unemployment in the bloc remained low in May.
US dollar (USD) pulls back as data disappoints
The US dollar (USD) stumbled yesterday as weaker-than-expected data and comments from Federal Reserve Chair Kevin Warsh weighed on the currency.
The latest ADP employment change figure pointed to a steeper-than-expected slowdown in jobs growth in June, while the ISM manufacturing PMI revealed an unexpected softening in factory activity. Meanwhile, Warsh said that inflation risks in the US have eased.
For USD investors, today’s spotlight falls on the latest non-farm payrolls report. An expected slowdown in employment growth could mute the American dollar, with any surprise results likely driving sharper movement.
Canadian dollar (CAD) mixed as crude prices fall
The commodity-linked Canadian dollar (CAD) traded in a wide range yesterday, with CAD avoiding losses against its weaker peers despite a fresh decline in oil prices.
Today, Canada’s latest manufacturing PMI could influence the ‘loonie’. An improvement in factory activity in June could help CAD tick higher, although oil price movements may complicate the picture.
Australian dollar (AUD) flat despite weak trade data
The Australian dollar (AUD) moved without a clear direction overnight amid a mixed market mood, with the ‘Aussie’ shrugging off an unexpected slump in Australian exports in May.
New Zealand dollar (NZD) rangebound amid muted sentiment
The New Zealand dollar (NZD) also traded mostly sideways last night, with an uncertain market mood confining NZD to a narrow range.
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