US Dollar (USD) Extends Selloff on PPI Miss
The recent selloff in the US Dollar (USD) continued yesterday after producer price inflation cooled more than forecast, adding to growing evidence that the Federal Reserve’s rate hiking cycle was achieving its desired effect.
This saw markets scale back their bets on more Fed hikes, which sent USD spiralling to a 15-month low.
This afternoon, the latest consumer sentient index from the University of Michigan is forecast to show an improvement. Could this be enough to boost USD?
Pound (GBP) Climbs as GDP Beats Forecasts
The Pound (GBP) rose against many of its peers yesterday after better-than-forecast GDP data increased market odds for another 50bps rate hike from the Bank of England (BoE).
Although GDP contracted in May, the 0.1% downturn was far better than the 0.3% decline economists had expected. With the UK economy seemingly stronger than anticipated, the BoE will likely press ahead with more aggressive action.
Turning to today, the Pound closes the week with no new data due out. As a result, Sterling movement could be muted.
Euro (EUR) Trades Widely amid Mixed Factors
The Euro (EUR) struggled for a clear direction yesterday as mixed factors played on the single currency.
Supporting EUR were hawkish meeting minutes from the European Central Bank (ECB) and the currency’s negative correlation with the US Dollar. However, a risk-on mood and weaker industrial production figures offset the upside.
Aside from the Eurozone’s balance of trade this morning, EUR data is fairly sparse today. As a result, the Euro could once again struggle to find a clear direction.
Canadian Dollar (CAD) Falls in Tandem with USD
The Canadian Dollar (CAD) fell against many of its rivals yesterday as the ‘Loonie’ suffered from its positive correlation with the tumbling US Dollar.
Looking ahead, Canadian data remains thin on the ground today so CAD could continue to be driven by its relationship with USD.
Australian Dollar (AUD) Stabilises amid Lack of Data
The Australian Dollar (AUD) levelled off last night, ending its recent impressive rally to move sideways amid thinner trading conditions.
New Zealand Dollar (NZD) Rangebound as Rally Subsides
Likewise, the New Zealand Dollar (NZD) was flat during the overnight session, though it held on to the week’s gains.