Pound (GBP) Muted amid Post-Furlough Concerns
The Pound (GBP) softened against many of its major rivals yesterday, despite unemployment dropping from 4.8% to 4.7% and average earnings increasing.
The downside seems to have be caused by concerns that the end of the government’s furlough scheme next month could lead to redundancies.
Turning to today, Sterling could struggle to make meaningful gains after this morning’s CPI revealed that inflation eased more than expected to 2% in July.
Euro (EUR) Edges Higher on Positive Data
The Euro (EUR) firmed against many of its peers during yesterday’s session after the Eurozone’s quarterly employment and GDP figures printed as expected.
Employment in the bloc increased by 0.5% in the second quarter of this year, while GDP grew by 2%, providing the single currency with a modest boost.
Looking ahead, the finalised Eurozone CPI is expected to confirm that inflation rose to 2.2%. Any unexpected results could affect EUR exchange rates.
US Dollar (USD) Jumps as Market Sentiment Sours
The US Dollar (USD) surged yesterday, hitting a three-week high against the Pound, as a risk-off market mood boosted demand for the safe-haven currency.
Fears of a global economic slowdown and rising cases of the Delta variant rattled markets, while a larger-than-expected contraction in US retail sales also dented risk appetite, thereby increasing the appeal of USD.
Market sentiment could be the primary influence for USD exchange rates today until the minutes from the latest Federal Open Market Committee (FOMC) meeting this evening. Investors will be searching the minutes for any clues of the Fed’s policy plans.
Canadian Dollar (CAD) Gains despite Drop in Oil
The Canadian Dollar (CAD) gained against many of its counterparts yesterday, climbing amid a spike in oil prices but unaffected when those prices dropped again.
This afternoon Canada’s inflation rate is expected to rise from 3.1% to 3.4%, which could give the ‘Loonie’ a boost.
Australian Dollar (AUD) Edges Higher on Improved Market Mood
The Australian Dollar (AUD) made some modest gains overnight after slumping in yesterday’s European session as risk appetite improved slightly.
New Zealand Dollar (NZD) Climbs on RBNZ Hawkishness
The New Zealand Dollar (NZD) strengthened overnight after the Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr hinted at a rate hike in the near future following the central bank’s latest policy decision.