Pound (GBP) Slumps on Gloomy GDP Figures
The Pound (GBP) fell sharply on Tuesday as GBP investors were left disappointed by the UK’s latest GDP figures.
The Office for National Statistics (ONS) reported the UK economy grew by just 1.8% in May, undershooting forecasts for a 5.5% expansion.
The underwhelming figures reflected poorly on Sterling as analysts warned that they likely point to the UK economy slumping a dramatic 25% in the second quarter.
Looking ahead, the pound may quickly bounce back from yesterday’s losses after the UK’s latest CPI figures revealed a surprise rise in domestic inflation last month.
Euro (EUR) Jumps Despite Deteriorating German Economic Sentiment
The Euro (EUR) soared through yesterday’s trading session, with the single currency benefiting from an upbeat market mood which undermined its main trading partner, the US Dollar (USD).
This upswing in the Euro came in spite of the latest ZEW survey’s revealing economic sentiment in Germany fell faster-than-expected this month.
The Euro may struggle to extend these gains through today’s session, however, with EUR investors likely to be reluctant to alter their positions in the single currency ahead of the upcoming European Central Bank (ECB) rate decision and EU summit of leaders.
US Dollar (USD) Sinks in Risk-On Trade
The US Dollar (USD) found itself on the back foot yesterday as improving market sentiment limited the appeal of the safe-haven currency.
While US CPI figures printed higher-than-expected on Tuesday, these failed to impress USD investors and only provided a temporary respite from the broad sell-off.
Turning to today’s session, the focus for USD investors will likely be on the latest US industrial production figures. Will a surge in factory output last month help to buoy the US Dollar today?
Canadian Dollar (CAD) Slips ahead of BoC Rate Decision
The Canadian Dollar (CAD) trended lower on Tuesday, with the oil-sensitive ‘Loonie’ retreating as WTI crude prices slipped back below $40 a barrel.
Coming up, we will see the Bank of Canada (BoC) conclude its latest policy meeting later today. No policy changes are expected from the BoC but we could see the Bank’s latest economic forecasts infuse some volatility into CAD exchange rates.
Australian Dollar (AUD) Bolstered by Vaccine Hopes
The Australian Dollar (AUD) struck higher in overnight trade, accelerating as hopes for a coronavirus vaccine bolstered market risk appetite.
However, the ‘Aussie’ may face renewed pressure later tonight as Australia’s latest jobs report is expected to report another rise in unemployment in June.
New Zealand Dollar (NZD) Muted on PM’s Coronavirus Warning
The New Zealand Dollar (NZD) was mostly rangebound overnight as rising risk appetite was offset by a warning from Prime Minister Jacinda Ardern that New Zealand remains at risk of another coronavirus outbreak.