Pound Left Rudderless Thanks to Empty Economic Data Calendar
There was little in the way of fresh developments yesterday to move Sterling. The Pound was left on mixed form, reacting to strength or weakness is other major currencies, thanks to a lack of domestic data.
Traders were still focused on last week’s ecostats, as their disappointing results have lowered the odds of the Bank of England (BoE) hiking interest rates.
There’s a speech from the BoE’s Deputy Governor, Ben Broadbent, coming up. If he talks about monetary policy, the Pound could be in for significant volatility.
GBP/EUR Weakens on German Trade Surplus Data
Trade data from Germany gave the Euro a boost yesterday, but GBP/EUR was able to settle above the day’s lows.
The Eurozone’s biggest economy saw its trade surplus swell in May, easily outpacing the forecast €18.1 billion to hit €22 billion.
While the Sentix investor confidence index for the Eurozone dropped by a single basis point, this was such a small change that it did not detract from the positivity surrounding the morning’s trade figures.
GBP/USD Ends Flat as US Dollar Supported by Fed Hike Bets
Friday’s strong US jobs data continued to provide support for the US Dollar yesterday, although by the end of the day GBP/USD had recovered to the morning’s opening levels. New economic data was lacking, but the rising odds of another interest rate hike from the Federal Reserve this year kept appetite for the US Dollar alive.
The Federal Reserve’s Lael Brainard will speak on the topic of monetary policy this afternoon. Her comments have the potential to alter the rate hike outlook and therefore the GBP/USD exchange rate.
Crude Oil Market Weakness Softens Canadian Dollar
Crude oil market volatility weakened the Canadian Dollar yesterday, with the commodity market softening on the persistence of US drilling companies.
Production from the States keeps rising, taking advantage of the space left by OPEC’s collaborative output cut, threatening to keep the global oversupply well-stocked for some time to come. Despite this, the Pound was unable to advance.
Chinese Inflation Data Gives AUD Pause for Thought
With the markets on sluggish form yesterday, the GBP/AUD exchange rate saw narrow fluctuations. Iron ore prices may have risen, lending support to the ‘Aussie’, but Chinese consumer price index figures for June disappointed forecasts after holding steady at 1.5% instead of inching up to 1.6%. This may not have been an earth-shattering development, but it still gave markets pause for thought and made AUD somewhat less appealing.
Lack of Data Keeps NZD on Soft Form
The volatility on the crude oil markets was weighing on global risk appetite, softening demand for the risky New Zealand Dollar. As with several of the other majors, the ‘Kiwi’ was suffering from an empty data calendar, so NZD could only find enough support to remain just above opening levels.
Data Released
12:00 GBP BOE’s Ben Broadbent speaks in Aberdeen
13:15 CAD Housing Starts (JUN)
17:30 USD Fed’s Brainard Speaks on Monetary Policy in New York
23:00 NZD ANZ Truckometer Heavy (MoM) (JUN)