Pound (GBP) Subdued as UK Inflation Slows
The Pound (GBP) was mostly muted through yesterday’s trading session, following the publication of the UK’s latest consumer price index.
July’s release revealed domestic inflation cooled more than expected, further dampening the short-term prospect of the Bank of England (BoE) tightening its monetary policy.
Sterling may continue to trade sideways today, as a lull in notable data leaves GBP exchange rates without any strong directional bias.
Euro (EUR) Flat as Eurozone Inflation Prints as Expected
The Euro (EUR) was mostly rangebound through Wednesday’s European trading session, after the Eurozone’s own CPI figures confirmed inflation in the bloc rose to 2.2% in July.
While this puts inflation above the European Central Bank’s (ECB) target, with the bank still reluctant to start tightening its monetary policy, the figures provided little support for the Euro.
In the absence of any notable Eurozone data, EUR investors may look to European coronavirus developments for fresh impetus today, potentially offering some support to the Euro as the continent’s vaccine programme comes closer to inoculating all adults.
US Dollar (USD) Strengthens amid Fed Tapering Talk
The US Dollar (USD) struck higher yesterday, with the currency extending this week’s winning streak, following the publication of the minutes from the Federal Open Market Committee’s (FOMC) July policy meeting.
These revealed that policymakers have begun tapering talks, and while they aren’t ready for this tapering to start immediately, this was enough to bolster USD exchange rates.
Coming up, the only data release of note today will be the publication of last week’s US jobless claims. Will another fall in new claims send the US Dollar higher this afternoon?
Canadian Dollar (CAD) Firms as Canadian Inflation Impresses
The Canadian Dollar (CAD) ticked higher on Wednesday, on the back of Canada’s latest CPI figures, which reported domestic inflation jumped to a new decade high of 3.7% last month.
Reinforcing this upside in the commodity-linked ‘Loonie’ was also a modest uptick in oil prices through yesterday’s session.
Australian Dollar (AUD) Slumps despite Upbeat Jobs Report
The Australian Dollar (AUD) trended lower overnight on Wednesday, as a prevailing risk-off mood saw investors shun the high-yield ‘Aussie’, in spite of Australia’s latest jobs report revealing that domestic unemployment fell to a 12-year low in July.
New Zealand Dollar (NZD) Tumbles in Risk-Off Trade
The New Zealand Dollar (NZD) also retreated overnight, with the risk-sensitive ‘Kiwi’ also falling victim to the gloomy market mood.