Pound (GBP) Rallies amid Risk-On Mood
The Pound (GBP) climbed against many of its peers yesterday as the increasingly risk-sensitive currency benefitted from a cheery market mood.
Signs that British food inflation is easing may have also lent Sterling support. The prospect of falling food prices could mean that the UK’s cost-of-living squeeze may start to loosen.
Today brings the final results of the UK’s services PMI. A confirmed slowdown in activity could dent GBP, while any revisions are likely to cause more pronounced movement.
Euro (EUR) Slips after German Exports Decline
The Euro (EUR) suffered headwinds from the start of yesterday’s European session, after weaker-than-forecast trade data from Germany.
Exports in the Eurozone’s largest economy unexpectedly contracted in May, with the country’s trade surplus narrowing. This raised fears about Germany’s economic health, which in turn dented the single currency.
EUR could face further difficulties today as the finalised PMI scores revealed that overall private sector activity was dragged into contractionary territory last month.
US Dollar (USD) Subdued in Thin Trade
The US Dollar (USD) was muted yesterday, with US markets closed for the Independence Day federal holiday.
Meanwhile, an upbeat market mood exerted some pressure on the safe-haven ‘Greenback’, causing it to stumble against its stronger peers.
Turning to today’s session, forecast improvements in US factory orders and economic optimism could boost USD this afternoon. Attention then turns to the Federal Reserve meeting minutes. Will a hawkish tone see USD rally?
Canadian Dollar (CAD) Supported by Rising Oil Prices
The commodity-linked Canadian Dollar (CAD) found success against its weaker peers yesterday, thanks to rising oil prices. However, a downbeat manufacturing PMI limited CAD’s upside potential.
With Canadian data lacking today, the ‘Loonie’ could continue to trade on oil prices. Could crude continue to rise, thereby boosting CAD?
Australian Dollar (AUD) Slips as PMI Downwardly Revised
The Australian Dollar (AUD) weakened overnight, trimming recent gains, as Australia’s final services PMI showed a larger-than-anticipated slowdown in the sector.
New Zealand Dollar (NZD) Flat amid Thin Trading Conditions
The New Zealand Dollar (NZD) traded sideways last night as thin trading conditions kept the ‘Kiwi’ in a narrow range.