Pound (GBP) tumbles as markets bet on BoE rate cuts
The pound (GBP) fell to new multi-month lows yesterday as markets began pricing in an interest rate cut from the Bank of England (BoE) in August.
Following dovish comments from BoE policymakers last week, analysts now expect the bank to cut rates by 50bps in August, rather than in September. This prompted a sharp selloff in the pound.
Turning to today, the UK’s preliminary PMIs are in the spotlight for GBP investors. If they show slowing private sector activity, Sterling could test new lows.
Euro (EUR) stumbles as consumer confidence misses forecasts
The euro (EUR) slipped yesterday as a risk-on mood weakened the safer single currency against its riskier peers.
In addition, the Eurozone’s latest consumer confidence index printed lower than expected, putting additional pressure on EUR.
This morning brings the latest Eurozone PMI results. A larger-than-expected acceleration in service sector activity this month could see the euro strengthen through today’s session.
US dollar (USD) muted as market mood improves
The US dollar (USD) traded without a clear direction yesterday as an improving market mood dampened demand for the safe-haven currency.
However, the ongoing pullback in Federal Reserve rate cut bets helped to keep USD afloat.
The latest S&P PMIs for the US are due out this afternoon. Although not as impactful as the ISM releases, the latest surveys could still boost the US dollar if they show an improvement in private sector activity.
Canadian dollar (CAD) firms despite wavering oil prices
The crude-linked Canadian dollar (CAD) managed to climb against many of its peers yesterday, despite a lack of Canadian data and choppy oil prices.
With economic data still in short supply today, CAD could be influenced by its positive correlations with oil and the US dollar.
Australian dollar (AUD) edges higher amid positive PMIs
The Australian dollar (AUD) firmed slightly overnight following Australia’s latest PMI results. Both the services and manufacturing surveys printed better than expected, lending AUD some support.
New Zealand dollar (NZD) flat amid mixed market mood
The New Zealand dollar (NZD) traded sideways last night as a tepid market mood kept the risk-sensitive ‘kiwi’ subdued.