Pound (GBP) supported as calm returns to bond markets
The pound (GBP) continued to stabilise yesterday as UK bond yields retreated further from the 27-year highs hit earlier in the week.
GBP investors welcomed the calm returning to bond markets, with the pound gaining ground against weaker peers and holding steady elsewhere.
Turning to today, the pound may be muted following mixed retail sales data. Although sales growth in July beat forecasts to print at 0.6%, June’s data was revised sharply lower from 0.9% to 0.3%.
Euro (EUR) muted as retail sales contract
The euro (EUR) softened yesterday after the Eurozone’s latest retail sales report showed a larger-than-forecast contraction in July.
However, the safer currency was able to rise against riskier peers thanks to a thoroughly downbeat market mood.
Looking ahead, the euro could struggle today after Germany reported a staggering 2.9% slump in factory orders in July.
US dollar (USD) firms amid gloomy mood and upbeat PMI
The US dollar (USD) marched higher yesterday as a risk-off market mood buoyed the safe-haven currency.
Fresh evidence that the US labour market was slowing saw USD waver in the afternoon, before a stronger-than-expected ISM services PMI provided the ‘greenback’ with renewed support.
Today, the spotlight falls on the latest US non-farm payrolls report. Another weak reading from this high-impact piece of American jobs data could sink the US dollar by fuelling bets on a more aggressive pace of interest rate cuts from the Federal Reserve.
Canadian dollar (CAD) undermined by falling oil prices
The crude-linked Canadian dollar (CAD) softened against its stronger rivals yesterday amid a decline in oil prices.
Canada’s latest jobs data could drag CAD lower today, with economists expecting unemployment to have risen to 7% in August, matching the near four-year high hit in May.
Australian dollar (AUD) firms amid risk-on mood
The Australian dollar (AUD) strengthened overnight as a positive shift in risk appetite boosted demand for the ‘Aussie’.
New Zealand dollar (NZD) rises as risk appetite returns
The New Zealand dollar (NZD) also climbed in overnight trade, with the cheery mood lifting the risk-sensitive ‘kiwi’.
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