Pound (GBP) Struggles following Weak Jobs Report
The Pound (GBP) fell sharply at the start of yesterday’s session as signs of a slowdown in the UK jobs market prompted a pullback in Bank of England (BoE) interest rate hike bets.
Although wage growth remained at a record high, investors focused on the rise in unemployment. The jobless rate rose to a near two-year high, while vacancies fell to their lowest level since June 2021.
Turning to today, the UK’s latest GDP figure this morning missed forecasts. The British economy shrank by 0.5% in July, worse than the expected 0.2% contraction. This is weighing on GBP.
Euro (EUR) Slips after Mixed German Data
The Euro (EUR) dropped yesterday, despite an unexpected improvement in Germany’s ZEW economic sentiment indicator.
While the headline score improved, this was broadly in line with international developments. The current conditions element of the index, meanwhile, plummeted to a three-year low. This pressured the Euro.
Looking ahead, an expected 0.7% contraction in Eurozone industrial production could see EUR fall further this morning.
US Dollar (USD) Firms amid Risk-Negative Trade
A gloomy market mood saw the safe-haven US Dollar (USD) strengthen yesterday, as investors avoided riskier assets in favour of the ‘Greenback’.
However, the currency found its gains capped as USD investors refrained from more aggressive bets ahead of today’s vital consumer price index.
August’s CPI, due out this afternoon, could tip the Federal Reserve in favour of an interest rate hike or hold at its meeting next week. With headline inflation set to rise while core inflation cools, we may see volatility.
Canadian Dollar (CAD) Rises as Oil Marches Higher
The Canadian Dollar (CAD) climbed yesterday as a steady rise in oil prices boosted the crude-linked ‘Loonie’.
With Canadian data remaining in short supply today, oil price dynamics may continue to drive CAD. If crude continues to climb, the ‘Loonie’ could enjoy further gains.
Australian Dollar (AUD) Drops amid Risk Aversion
The Australian Dollar (AUD) slipped during overnight trade as a souring market mood dented the risk-sensitive currency.
New Zealand Dollar (NZD) Declines as Market Mood Sours
The New Zealand Dollar (NZD) also fell last night, with the riskier ‘Kiwi’ losing support as sentiment soured.