Pound Exchange Rates (GBP) Rally on Upbeat Inflation figures
The Pound (GBP) struck higher through yesterday’s trading session in response to the UK’s better-than-expected consumer price index.
With inflation unexpectedly rising for the first time in 2020 last month, GBP investors appeared hopeful that it may offer the Bank of England more leeway when considering adopting unconventional monetary policy.
However, Sterling has already begun to shed a portion of these gains this morning after the UK’s latest jobs report revealed a shocking slump in wage growth in May.
Euro (EUR) Subdued in Risk-On Trade
The Euro (EUR) struggled to find momentum yesterday as investors remain reluctant to make any bullish bets on the single currency ahead of a busy second half to the week.
This left the Euro exposed to the strength of its peers, many of which surged in response to improving market sentiment.
Today’s focus will be on the European Central Bank’s (ECB) latest rate decision. No policy changes are expected today as the ECB awaits a response from EU leaders in regard to fiscal stimulus, but the bank may still influence EUR exchange rates with its forward guidance.
US Dollar (USD) Sidelined by Vaccine Hopes
The US Dollar (USD) stumbled through Wednesday’s session, with demand for the safe-haven currency faltering as reports of positive progress towards a coronavirus vaccine from US biotech group Moderna was cheered by investors.
This left the ‘Greenback’ on the back foot, despite data showing US industrial production rose faster-than-expected in June.
Coming up, we may see the US Dollar attempt to rally later today as the latest US retail sales figures are forecast to show a strong expansion of sales growth last month.
Canadian Dollar (CAD) Muted as BoC Predicts Sharp Slump in GDP
The Canadian Dollar (CAD) was left rangebound on Wednesday. An uptick in oil prices was offset by forecasts from the Bank of Canada (BoC) that the Canadian economy will shrink by 7.8% in 2020 and won’t recover to its pre-coronavirus levels until 2022.
Australian Dollar (AUD) Slides as Unemployment Rate Jumps
After rallying through Wednesday’s trading session, the Australian Dollar (AUD) found itself back on the defensive overnight after Australia’s latest jobs report revealed unemployment rocketed to a near 22-year high last month.
New Zealand Dollar (NZD) Slides on Sharp Drop in Inflation
The New Zealand Dollar (NZD) also struggled in overnight trade, with investors shunning the ‘Kiwi’ after New Zealand’s CPI figures revealed domestic inflation contracted 0.5% in the second quarter.