US Dollar (USD) Fluctuates amid US Debt Ceiling Developments
The US Dollar (USD) strengthened through yesterday’s European trading session ahead of the House of Representatives debt ceiling vote.
USD exchange rates then tumbled as market sentiment improved after the deal to raise the debt limit was passed.
In terms of data, the focus for USD investors today will be the latest ISM manufacturing PMI. Could another contraction in the US factory sector spook investors and buoy demand for the safe-haven currency?
Pound (GBP) Underpinned by BoE Rate Hike Bets
The Pound (GBP) continued to attract support yesterday as investors continue to aggressively bet on additional Bank of England (BoE) interest rate hikes.
GBP investors are increasingly confident the BoE will need to raise interest rates to at least 5.5% by the end of 2023 as it struggles to bring UK inflation to heel.
Today will see the publication of May’s finalised manufacturing PMI. But barring a notable revision from the preliminary release this may have limited impact on the Pound.
Euro (EUR) Subdued amid Easing ECB Rate Expectations
The Euro (EUR) trended lower on Wednesday amid an easing of European Central Bank (ECB) rate hike bets.
This followed the publication of France’s and Germany’s consumer price indexes, which both reported inflation cooled more than expected in May.
If this is mirrored in the Eurozone CPI figures today, this could pull the Euro sharply lower as it further dampens ECB rate expectations.
Canadian Dollar (CAD) Buoyed by Impressive Rebound in GDP
The Canadian Dollar (CAD) trended higher on Wednesday, with the ‘Loonie’ drawing support after Canada’s first-quarter GDP figures outpaced expectations.
However, the commodity sensitive currency’s upside potential was simultaneous tempered by a sharp downturn in oil prices.
Australian Dollar (AUD) Bolstered by Upbeat Chinese Data
The Australian Dollar (AUD) trended higher overnight on Wednesday as China’s Caixin manufacturing PMI reported a surprise rebound in factory sector growth.
New Zealand Dollar (NZD) Fluctuates in Mixed Trade
The New Zealand Dollar (NZD) initially firmed in overnight trade amid an upbeat market mood. Before a subsequent souring of sentiment led the ‘Kiwi’ to relinquish the majority of these gains.