Pound (GBP) Choppy amid Lack of Data
The Pound (GBP) experienced volatility yesterday, initially climbing higher before sliding in the afternoon.
The catalyst for the movement was not immediately apparent, but mixed feelings about more UK interest rate hikes could have prompted the volatility. Investors are worried that tighter financial conditions could see the UK enter a recession.
So far this morning, the Pound has dropped sharply after UK inflation missed forecasts. Core inflation unexpectedly eased from 7.1% to 6.9% while headline inflation cooled rapidly from 8.7% to 7.9%. The prospect of less action from the Bank of England (BoE) could weigh on Sterling today.
Euro (EUR) Fluctuates Lower amid Thin Conditions
The Euro (EUR) also witnessed choppy trade yesterday, with a lack of data leaving the single currency struggling to find support.
Russia-Ukraine worries may have applied some pressure to EUR exchange rates. Analysts were concerned about the Kremlin’s retaliation for a strike on the Crimean bridge, which killed two Russian civilians.
Turning to today, the Eurozone’s final inflation rate for June is due out later this morning. Could confirmation of a notable drop in inflation see the Euro soften?
US Dollar (USD) Firms amid Souring Mood
The US Dollar (USD) edged higher during yesterday’s session as a fading appetite for risk boosted the safe-haven currency’s appeal.
Disappointing US retail sales data in the afternoon may have capped USD’s recovery, after sales growth unexpectedly slowed in June.
US economic data is in short supply today, so the market mood could drive USD movement. Currently, markets are risk-on, which may dampen the US Dollar’s appeal.
Canadian Dollar (CAD) Rises despite Inflation Miss
The Canadian Dollar (CAD) rose yesterday after Canada’s CPI figures. Although headline inflation cooled more than forecast, two measures of underlying inflation printed higher than expected, keeping rate hike bets alive.
Today, there are no notable Canadian data releases scheduled to print. As a result, the commodity-linked ‘Loonie’ could trade on oil price dynamics. Could oil volatility see CAD waver?
Australian Dollar (AUD) Weakens in Absence of Data
The Australian Dollar (AUD) softened in overnight trade as a lack of notable Australian data left the ‘Aussie’ vulnerable to losses.
New Zealand Dollar (NZD) Spikes and Slips following CPI
The New Zealand Dollar (NZD) initially jumped last night after New Zealand inflation exceeded forecasts. However, the ‘Kiwi’ quickly turned south as the CPI release is unlikely to change the Reserve Bank of New Zealand’s (RBNZ) stance on policy.