Pound (GBP) Slides as Investors Cash In Monthly Highs
Profit-taking struck the Pound (GBP) yesterday, causing Sterling to fall from monthly highs against some major peers.
Bank of England (BoE) policymaker Jonathan Haskel’s remarks that further interest rate hikes could be necessary did little to cushion GBP.
The UK’s latest jobs report looks to underpin the Pound this morning. A surprise drop in unemployment coupled with a sharp acceleration in wage growth is likely to bolster BoE rate hike bets.
Euro (EUR) Floats Upward ahead of ECB Decision
The Euro (EUR) firmed yesterday amid bets on further tightening from the European Central Bank (ECB), ahead of their imminent decision on Wednesday.
While the path beyond this decision is unclear, the perceived guarantee of a 25bps hike has been enough to buoy the common currency.
Later this morning, the ZEW economic sentiment index is due to print. Another deterioration is expected for June’s reading, which may dent EUR.
US Dollar (USD) Struggles amid Dovish Fed Expectations
Perceptions of a dovish shift in the Federal Reserve weighed on the US Dollar (USD) yesterday, along with an upbeat market mood.
With economists expecting the Fed to pause their current hiking cycle, investors began to seek out more immediate returns. Furthermore, the prospect of a pause also cheered markets which applied more pressure on the safe-haven currency.
This afternoon brings the release of the latest US consumer price index. Headline inflation is forecast to cool significantly, which may weaken the ‘Greenback’.
Canadian Dollar (CAD) Weakens amid Oil Price Fall
The oil-linked Canadian Dollar (CAD) weakened yesterday, as the recent oil price rally appeared to come to an end.
Oil price fluctuations could continue to weigh on the ‘Loonie’ today, amid a lack of notable domestic data.
Australian Dollar (AUD) Rallies on Upbeat Trade
The risk-sensitive Australian Dollar (AUD)| climbed overnight on a cautiously optimistic market mood, shrugging off mixed data.
New Zealand Dollar (NZD) Climbs amid Risk-On Market Mood
The New Zealand Dollar (NZD) also gained ground overnight as the ‘Kiwi’ benefitted from the uptick in market risk appetite.