Pound (GBP) Consolidates Gains in Anticipation of BoE Hike
The Pound (GBP) ended the week on a positive note as hawkish Bank of England (BoE) rate hike bets boosted the UK currency.
The strength came after a week of hawkish hints from the European and US central banks and hot UK data, including falling unemployment, rising age growth, and a recovery in the British economy.
GBP may start the session muted, with data thin on the ground ahead of high-impact events later in the week. Investors may be hesitant ahead of UK inflation on Wednesday and the BoE decision on Thursday.
Euro (EUR) Relinquishes Post-ECB Gains
The Euro (EUR) initially strengthened on Friday as tailwinds following the European Central Bank’s (ECB) rate hike on Thursday continued to help the single currency.
However, EUR suffered from its negative correlation with the US Dollar (USD) in the afternoon, causing it to stumble. A risk-on mood also pressured the safer Euro while boosting its riskier peers.
Today, Eurozone data is absent from the calendar. As a result, EUR could trade without a clear direction.
US Dollar (USD) Recovers as Consumer Sentiment Improves
An upbeat mood saw the safe-haven US Dollar (USD) soften at the start of Friday’s trade.
In the afternoon, USD managed to recover some ground. The latest consumer sentiment index from the University of Michigan rose to a four-month high, beating expectations.
Amid the closure of US markets for the Juneteenth Federal holiday, thin trading conditions in the US Dollar could leave it vulnerable to losses.
Canadian Dollar (CAD) Rises Alongside Oil
The crude-linked Canadian Dollar (CAD) climbed on Friday as rising oil prices and bets on another Bank of Canada (BoC) interest rate rise boosted the currency.
Looking ahead, Canada’s PPI – a measure of wholesale inflation – is due out today. Will a sharp rise in PPI boost BoC bets?
Australian Dollar (AUD) Fluctuates in Mixed Trade
The Australian Dollar (AUD) traded in a wide range in overnight trade. Risk-off flows initially undermined the ‘Aussie’, before hopes for further China economic stimulus cheered markets and revived AUD demand.
New Zealand Dollar (NZD) Volatile amid Changeable mood
Trade in the New Zealand Dollar (NZD) mirrored that of the Australian Dollar overnight, with the ‘Kiwi’ fluctuating amid mixed risk appetite.