Pound (GBP) Slips as Covid Cases Rise
The Pound (GBP) weakened against most of its rivals yesterday, hitting a one-month low against the US Dollar (USD) and a 17-day low against the Euro (EUR).
The downside came as Covid cases, deaths and hospitalisations continue to creep up in the UK, while a softer-than-expected CPI the previous day also kept pressure on the Pound.
Looking ahead, Sterling could dip today as the UK’s retail sales figures for July unexpectedly contracted this morning, printing at -2.5% rather than the 0.4% expected.
Euro (EUR) Strengthens on Bright EU Outlook
The Euro (EUR) firmed during yesterday’s session, as higher European morale allowed the single currency to advance on its weaker counterparts.
The EU’s vaccination rollout is advancing at a rapid pace, while case numbers – which are far below those in the UK and US – are declining.
Turning to today, Germany’s producer price index rose by over double the expected 0.8% to come in at 1.9%, which could help boost the Euro.
US Dollar (USD) Gains on Cautious Trade
The US Dollar (USD) climbed yesterday as tailwinds from the Federal Open Market Committee’s (FOMC) latest meeting minutes continued to support the ‘Greenback’.
Adding to USD’s strength was the prevailing risk-off market mood, fuelled by the spread of the Delta variant and fears that the Fed may soon begin to wind down its monetary stimulus programme.
With no major US data out today, risk sentiment could continue to influence the US Dollar.
Canadian Dollar (CAD) Slides as Oil Drops to Three-Month Low
The Canadian Dollar (CAD) tumbled yesterday, hitting a six-month low against the US Dollar, as oil prices continued to fall to their worst level in three months.
The drop in oil comes as rising global Covid cases dent demand and a strengthening US Dollar weighs on the cost of crude.
CAD could find some support today, as Canadian retail sales are expected to have risen 4.4% in June after a 2.1% contraction in May. However, if oil prices remain low, this may not be enough to trigger a recovery.
Australian Dollar (AUD) Slips amid Risk-Off Sentiment
The Australian Dollar (AUD) continued to fall in overnight trade, as the risk-sensitive ‘Aussie’ struggles to find support amid the ongoing downbeat market mood.
New Zealand Dollar (NZD) Down on Gloomy Market Mood
The New Zealand Dollar (NZD) ticked lower overnight, as the bearish market sentiment continued to weigh on the risk-sensitive ‘Kiwi’.