Pound (GBP) Adrift amid Lack of Data
The Pound (GBP) wavered yesterday, as a lack of UK data left Sterling open to losses, particularly amidst fresh Brexit uncertainty.
However, continued tailwinds from the Bank of England’s (BoE) switch in stance last week may have limited GBP’s downside.
With UK data still thin on the ground today, the Pound may continue to struggle to find direction ahead of tomorrow’s GDP figures.
Euro (EUR) Dips on Low Investor Confidence
The Euro (EUR) slipped through yesterday’s session, after investor confidence in the Eurozone slumped to a nine-month low.
The ZEW economic sentiment indexes for both Germany and the Eurozone plunged to their worst levels since November, as fears of rising Covid cases and a global economic slowdown dented morale.
Today, Germany’s CPI confirmed that inflation surged to 3.8% in July, though EUR investors seem hesitant ahead of the US inflation figures this afternoon, which could drive more movement in the Euro.
US Dollar (USD) Muted on Disappointing Data
The US Dollar (USD) was subdued yesterday, after some low-impact data releases missed forecasts, while an absence of more impactful data saw the ‘Greenback’ trade in a narrow range.
Both the small business optimism index and nonfarm productivity report printed below expectations, leaving USD open to losses as some of its riskier rivals strengthened.
Looking ahead, the latest US inflation figure is expected to ease slightly from 5.4% to 5.3%. If the CPI overshoots expectations again this could fuel hopes that the Federal Reserve will begin tapering bond purchases, thereby boosting USD.
Canadian Dollar (CAD) Firms as Oil Prices Recover
The Canadian Dollar (CAD) climbed yesterday as a recovery in oil prices boosted the commodity-linked currency.
CAD could see some losses later today, depending on the US inflation figure, due to the negative correlation between CAD and USD.
Australian Dollar (AUD) Slips on Consumer Confidence Miss
The Australian Dollar (AUD) dipped in overnight trade after Australia’s Westpac consumer confidence reports missed forecasts.
New Zealand Dollar (NZD) Flat in Absence of Data
The New Zealand Dollar (NZD) traded sideways overnight, as a lack of data left the ‘Kiwi’ without a clear directional bias.