Pound (GBP) Fluctuates amid Mixed Headlines
The Pound (GBP) wavered through yesterday’s trading session, as a positive economic outlook was offset by concerns over the UK labour market.
The latest consumer credit figures printed at £0.28bn, showing that consumers borrowed more than they paid off for the first time since August 2020. This indicates increased consumer confidence and a recovering economy.
However, Sterling struggled to make gains as concerns over future job losses and staff shortages undermined the optimistic outlook.
Following this morning’s GDP figures, which came in slightly worse than expected at -1.6%, the Pound may face an uphill battle today.
Euro (EUR) Capped by Demand for USD
The Euro (EUR) had a mixed day of trading yesterday, with some positive economic data undermined by a strong US Dollar (USD).
Economic sentiment rose to its highest level since a record high in May 2000, beating market forecasts of 116.5 to come in at 117.9. The figure is above both the long-term average and pre-pandemic levels, pointing to high morale around the Eurozone’s economic recovery.
However, the Euro’s gains were undermined by increasing demand for the US Dollar, with the single currency pressured by its strong negative correlation with the ‘Greenback’.
Today’s Eurozone inflation figures are forecast to show a 1.9% rise, which may support the Euro, though any upside may be limited by the European Central Bank’s (ECB) ongoing dovish bias.
US Dollar (USD) Firms amid Risk-Off Sentiment
The US Dollar (USD) climbed yesterday, hitting eight-day highs against both the Pound and the Euro, as souring market sentiment increased demand for the safe-haven ‘Greenback’.
USD held on to its gains in the afternoon following the Conference Board’s US Consumer Confidence Index, which jumped to 127.3 in June, above both last month’s figure of 120 and market expectations of 119.
This afternoon, the ADP employment change figures could see USD climb even higher, as they are expected to reveal that 600,000 new employees were hired this month.
Canadian Dollar (CAD) Muted by Rising US Dollar
The Canadian Dollar (CAD) struggled to make any lasting gains against most of its peers yesterday, despite a modest uptick in oil prices.
CAD may face more headwinds this afternoon, as month-on-month GDP is forecast to have contracted by 0.8% in April.
Australian Dollar (AUD) Firms despite Risk-Off Sentiment
The Australian Dollar (AUD) ticked slightly higher overnight despite a bearish market mood and a surge in coronavirus cases, both of which may weigh on the ‘Aussie’ as the day goes on.
New Zealand Dollar (NZD) Makes Modest Gains
The New Zealand Dollar (NZD) also trended higher overnight, with no clear catalyst for the movement. If risk sentiment remains cautious, NZD could lose these modest gains today.