Pound (GBP) Dips amid Lack of Data
The Pound (GBP) dipped against most of its rivals yesterday, as a lack of UK data left Sterling open to losses.
A continued strong economic recovery in the UK and optimism over the 19 July lifting of further restrictions helped to limit the downside.
Sterling could face some challenges this morning, as a number of data releases just missed market forecasts. Most significantly is the UK’s GDP, which slowed to 0.8% in May, below expectations of 1.5% growth.
Euro (EUR) Climbs ahead of ECB Strategy
The Euro (EUR) jumped yesterday, hitting a three-week high against the Pound, following the European Central Bank’s (ECB) new strategy announcement.
The ECB has adopted a new symmetrical 2% inflation target, replacing its previous close-to-but-below 2% target. Policymakers believe the new strategy is clearer to communicate and allows for more flexibility.
With no data coming out of the Eurozone today, factors such as risk sentiment and European coronavirus news could drive most movement in the single currency.
US Dollar (USD) Muted despite Cautious Market Mood
The US Dollar (USD) softened yesterday, falling against the Euro and trading mostly sideways with its other rivals.
A risk-off sentiment continues to provide some support for the safe-haven currency, but low US Treasury yields and yesterday’s worse-than-expected unemployment data weighed on the ‘Greenback’.
In the absence of any major market-moving data, USD exchange rates will likely be influenced by an increasingly risk-averse market mood and rising US Treasury yields. Could the US Dollar make some gains today?
Canadian Dollar (CAD) Pressured by Low Oil Prices
The Canadian Dollar (CAD) bounced off a 10-week low against the Pound but remained muted, with oil prices still struggling following the OPEC+ supply dispute.
WTI crude briefly dropped below $71 a barrel yesterday before rising back up above $73, pulling the oil-sensitive ‘Loonie’ with it.
With oil prices unpredictable at the moment, it’s possible that CAD will remain volatile today, although an upbeat jobs report could extend some support to the ‘Loonie’ this afternoon.
Australian Dollar (AUD) Subdued amid Coronavirus Outbreak
The Australian Dollar (AUD) traded mostly sideways overnight, with a lack of data keeping the ‘Aussie’ in a low, narrow range as coronavirus cases rise.
New Zealand Dollar (NZD) Muted on Risk-Off Sentiment
The New Zealand Dollar (NZD) was relatively rangebound in overnight trade, with a prevailing risk-off sentiment keeping the ‘Kiwi’ under pressure.