Pound Slips after MPs Pass NI Protocol Bill

Pound (GBP) Falters following NI Protocol Bill Vote

The Pound (GBP) fell against the majority of its peers yesterday as GBP investors worried about the potential fallout of the Northern Ireland Protocol Bill after MPs voted in favour of a second reading. Critics say the bill could trigger a trade war with the EU.

In addition, fears that the UK faces a summer of discontent weighed on Sterling. As inflation rapidly outpaces wage growth, workers across multiple sectors of the UK economy are striking.

This afternoon, Bank of England (BoE) Governor Andrew Bailey is due to speak. His comments could trigger sharp movement in Pound Sterling. Will he strike a hawkish tone? Or could he warn against a possible wage-price spiral?

Euro (EUR) Falls despite Hawkish ECB Comments

The Euro (EUR) slipped during yesterday’s session, despite hawkish comments from European Central Bank (ECB) President Christine Lagarde. Lagarde hinted at a steeper rate rise in September, with further hikes to follow. However, EUR investors seemed unimpressed.

Instead, the single currency came under pressure due to its negative correlation to a stronger US Dollar (USD).

Today there are a number of potentially impactful data releases out of the Eurozone, including economic sentiment in the bloc and Germany’s latest flash inflation rate. Another speech from Christine Lagarde could also provide some trading impetus.

US Dollar (USD) Recovers on Rising Treasury Yields

The safe-haven US Dollar dipped against its stronger peers yesterday morning as a bullish market mood dented the currency.

However, a rise in US Treasury bond yields supported the ‘Greenback’ in the afternoon. USD recouped its losses and climbed against its weaker rivals.

Looking ahead, a speech from Federal Reserve Chair Jerome Powell is in the spotlight for USD investors. Any comments about monetary policy or the possibility of a US recession could impact the US Dollar.

Canadian Dollar (CAD) Mixed as Oil Prices Waver

The commodity-linked Canadian Dollar (CAD) traded without a clear direction yesterday amid a lack of economic data and limited movement in the oil market.

With notable Canadian data still thin on the ground today, CAD could struggle for a clear trajectory once again.

Australian Dollar (AUD) Declines as Sentiment Sours

The Australian Dollar (AUD) slipped overnight, despite better-than-forecast retail sales figures, as a gloomy market mood weighed on the risk-sensitive ‘Aussie’.

New Zealand Dollar (NZD) Relinquishes Gains amid Downbeat Trade

The New Zealand Dollar (NZD) initially firmed in overnight trade but couldn’t sustain the upside as risk aversion put pressure on the ‘Kiwi’.

Samuel Birnie

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