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US dollar falters as risk appetite improves

currency-newsUS dollar falters as risk appetite improves
The US dollar was muted during Thursday’s European session as an improving market mood sapped demand for the safe-haven currency.

Meanwhile, the pound is struggling so far this morning, with GBP/EUR muted at €1.1813 and GBP/USD dipping to $1.1904. GBP/CAD is rangebound at C$1.5444, while GBP/AUD and GBP/NZD are subdued at AU$1.7234 and NZ$1.9100, respectively.

In the spotlight today will be the UK’s latest retail sales figures. Will a surprise bump in sales growth last month help to underpin Sterling through today’s session?

What’s been happening?

The US dollar’s recent winning streak appeared to run out of steam yesterday, with demand for the safe-haven currency waning amid a pick up in market risk appetite.

USD exchange rates remained steady despite the latest US jobless figures beating expectations, with new jobless claims unexpectedly dropping in the second week of July.

The pound also struggled to find any strong directional bias on Thursday, Sterling sentiment remaining suppressed by economic concerns and political uncertainty.

The euro, meanwhile, was able to draw support from the publication of the Eurozone’s consumer price index. July’s finalised figures confirmed inflation accelerated to a record high on 8.9% and underpinned expectations for another 50bps rate hike from the European Central Bank (ECB) next month.

What’s coming up?

Kicking off today’s session was the publication of some upbeat UK retail sales figures.

According to data published by the Office for National Statistics (ONS), UK sales growth unexpectedly expanded by 0.3% in July. This beat forecasts for a 0.2% contraction and may help to ease fears the UK is hurtling toward a recession.

Germany also released its latest PPI figures earlier this morning. July’s release reported a surprising strong uptick in producer prices, bolstering the euro on expectations this will feed through into higher inflation in the future.

Meanwhile, a lull in notable US economic data is likely to see the US dollar driven by risk dynamics today. Will another souring of market sentiment help the ‘greenback’ to close out the session on a positive note?

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