US Dollar (USD) Hit by Profit-Taking
Having hit multi-week highs following unexpectedly strong GDP data on Thursday, the US Dollar (USD) then ran afoul of some profit-taking at the start of Friday’s session.
The ‘Greenback’ was unable to win back these losses as the day unfolded, as a cooldown in the core PCE price index – the Federal Reserve’s favoured measure of inflation – dampened Fed bets.
Looking ahead, a lack of US economic data today could leave the ‘Greenback’ to trade on risk appetite, at the start of this week. An upbeat mood may dent USD exchange rates.
Pound (GBP) Gains Ground despite Lack of Data
The Pound (GBP) ended last week’s session on a positive note, despite a lack of UK economic data.
Expectations of more hawkish action from the Bank of England (BoE) underpinned Sterling, allowing it to climb against some of its struggling peers.
Turning to the session ahead, notable UK data is in fairly short supply until the BoE decision on Thursday. As a result, Sterling may be muted.
Euro (EUR) Climbs despite German Data Miss
The Euro (EUR) initially stumbled on Friday after new data showed that German GDP stalled in the second quarter, rather than rising by 0.1% as expected.
However, the single currency found renewed strength as the session progressed. EUR seemed to benefit from its negative correlation with a weaker US Dollar (USD).
Turning to today, the Eurozone’s second-quarter GDP and July inflation rate are due out. A recovery in the bloc’s economy could lift EUR, while signs of sticky inflation may add to the upside.
Canadian Dollar (CAD) Slips as GDP Shrinks
The oil-tied Canadian Dollar (CAD) fell on Friday amid volatile crude prices and an unexpected contraction in Canadian GDP.
Canadian data is thin on the ground today. As a result, oil price dynamics could drive CAD’s movement. Will falling oil prices pull the ‘Loonie’ lower?
Australian Dollar (AUD) Firms in Upbeat Trade
The Australian Dollar (AUD) opens this week on the front foot, with the risk-sensitive ‘Aussie’ strengthening amid a prevailing risk-on mood.
New Zealand Dollar (NZD) Buoyed by Risk-On Flows
The New Zealand Dollar (NZD) is off to a positive start this week as the ‘Kiwi’ also benefits from the uptick in risk appetite.