Pound (GBP) Dips on Dovish BoE Comments
The Pound (GBP) lost ground yesterday, following dovish comments from the Bank of England (BoE) and below-forecast manufacturing figures.
Following the warning from departing BoE Chief Economist Andy Haldane over ‘dangerous’ inflationary pressures, BoE Governor Andrew Bailey defended the central bank’s dovish stance, reiterating his view that the recent rise in inflation is ‘transitory’.
Shortly after, the UK’s final manufacturing PMI printed at 63.9, below expectations of 64.2. These two factors dragged Sterling down, with GBP/USD hitting an 11-week low.
With no data due out of the UK today, domestic coronavirus statistics will likely influence GBP exchange rates.
Euro (EUR) Firms on Better-than-Expected Manufacturing PMIs
The Euro (EUR) climbed against most of its major rivals yesterday, with the Eurozone and German manufacturing PMIs for June both printing above expectations.
Both figures also showed an increase in factory activity from May to June. Germany’s PMI increased from 64.4 to 65.1, while the Eurozone’s rose from 63.1 to 63.4, a new record high and the twelfth successive month of expansion in the manufacturing sector.
In the absence of any market-moving data releases from the Eurozone tomorrow, coronavirus news could impact the Euro. Will rising cases of the Delta variant undermine the single currency?
US Dollar (USD) Firms on Strong Jobs Data
The US Dollar (USD) had a mixed session of trading yesterday, dipping around midday before bouncing back against most of its counterparts.
The downside seemed to come as USD investors waited for the day’s data releases, with better-than-expected initial jobless claims prompting USD to regain ground.
The ISM manufacturing PMI also seems to have supported USD, despite falling short of forecasts. The ISM came in at 60.6, below expectations of 61, but still indicates a strong recovery in US manufacturing activity.
Today’s non-farm payroll figures will be in the spotlight for USD investors, with the US economy predicted to have added 700,000 jobs last month. If the report meets market expectations, USD could gain even more ground.
Canadian Dollar (CAD) Strengthens as Oil Breaks $76 a Barrel Mark
The Canadian Dollar (CAD) trended higher yesterday, with the oil-linked ‘Loonie’ fuelled by a surge in WTI crude, which hit a six-year high of $76 a barrel.
CAD may keep firming this morning if oil prices sustain their highs, while Canada’s balance of trade figures this afternoon could push the ‘Loonie’ either way, as forecasts are divided as to whether the results will show a trade surplus or deficit in May.
Australian Dollar (AUD) Flat in Absence of Market-Moving Events
The Australian Dollar (AUD) traded sideways overnight, with no big data releases or news developments driving movement in the ‘Aussie’.
New Zealand Dollar (NZD) Muted ahead of US Data
Likewise, the New Zealand Dollar (NZD) was rangebound in overnight trade. Investors seem to be awaiting the US data today, which could support the US Dollar and sap demand for risk-sensitive currencies.