Pound (GBP) mixed amid lack of data
A lack of UK economic data left the increasingly risk-sensitive pound (GBP) to be driven by market sentiment yesterday.
An improving mood saw GBP move higher against its safer peers while weakening against riskier rivals.
UK data remains in short supply today, which could leave the pound subdued and lacking a clear direction.
Euro (EUR) softens ahead of ECB decision
The euro (EUR) fell against its stronger rivals yesterday amid growing anticipation of a dovish pivot at the European Central Bank’s (ECB) upcoming interest rate decision.
However, the single currency managed to inch higher against its weaker counterparts thanks to its negative correlation with a softer US dollar (USD).
Turning to today’s session, EUR could continue trade in a narrow range as EUR investors refrain from placing aggressive bets ahead of tomorrow’s ECB decision.
US dollar (USD) wavers as risk appetite shifts
The US dollar initially dropped yesterday, striking a two-week low against some currencies, due to a risk-on market mood and a decline in US Treasury yields.
However, sentiment soured during the American trading hours, helping USD recoup losses.
Turning to today, all eyes are on the latest US consumer price index. An expected uptick in inflation could pour cold water on bets for a June rate cut from the Federal Reserve, which in turn may see USD surge.
Canadian dollar (CAD) slips as oil prices decline
The crude-linked Canadian dollar (CAD) ticked lower yesterday as retreating oil prices weighed on the currency.
In focus today for CAD investors is the Bank of Canada’s (BoC) interest rate decision. Any signals that the bank may soon start to consider cutting rates could see the ‘loonie’ slump.
Australian dollar (AUD) flat amid thin conditions
The Australian dollar (AUD) traded in a narrow range last night as a tepid market mood and lack of Australian data limited AUD movement.
New Zealand dollar (NZD) rises following RBNZ decision
The New Zealand dollar (NZD) strengthened overnight following the Reserve Bank of New Zealand’s (RBNZ) interest rate decision. While the RBNZ left interest rates unchanged, the consensus among policymakers was that rates would need to remain high for a ‘sustained period’.