Pound (GBP) Still Pressured by BoE Comments
The Pound (GBP) continued to slide on Friday, following the Bank of England’s (BoE) dovish policy announcement on Thursday, in which the bank said it did not want to damage the UK’s economic recovery by tightening policy prematurely.
Coronavirus fears also weighed on the Pound, with cases of the Delta variant of the virus rising rapidly across the country.
The Confederation of British Industry’s distributive trades data did little to alleviate the downside in GBP, despite printing well above expectations at +25, its highest figure since August 2018.
Today the new health secretary Sajid Javid will update MPs on when the remaining lockdown restrictions will be lifted. Any news that UK restrictions will be lifted earlier than expected could bolster the Pound.
Euro (EUR) Firms on German Consumer Confidence
The Euro (EUR) strengthened through Friday’s trading session, buoyed by a rise in German consumer confidence.
Germany’s Gfk Consumer Climate Indicator rose to -0.3, its highest level since August 2020, beating expectations of -4. The results point to increasing economic optimism among German consumers, boosting EUR.
This upside was limited, however, by the rebound in the US Dollar (USD), with the single currency’s gains capped by its negative correlation to the ‘Greenback’.
In the absence of any market-moving data from the Eurozone, the Euro could be mostly driven by coronavirus headlines, with any negative news around the Delta variant potentially dragging on EUR.
US Dollar (USD) Rallies amid Rising Treasury Yields
The US Dollar rebounded at the end of last week following a sudden spike in US Treasury yields.
The 10-year yield jumped from 1.485% to 1.539% through Friday’s session, giving the ‘Greenback’ a boost.
With no impactful data coming out of the US today, Treasury yields and risk appetite are likely to exert the most influence over USD exchange rates.
Canadian Dollar (CAD) Climbs on Rising Oil Prices
The Canadian Dollar (CAD) firmed on Friday, with the oil-linked ‘Loonie’ propelled by WTI crude prices, which rose to highs of $74.17 a barrel.
Looking ahead, oil prices are likely to drive most movement in the Canadian Dollar through today’s session.
Australian Dollar (AUD) Gains on China’s Industrial Profits
The Australian Dollar (AUD) ticked slightly higher in overnight trade, after China’s industrial profits grew by 83.4% in May, beating market forecasts of an 82% increase.
New Zealand Dollar (NZD) Strengthens amid Risk-On Sentiment
The New Zealand Dollar (NZD) also gained on most of its peers overnight, buoyed by China’s industrial profits and a more bullish market mood.