Pound (GBP) wavers following CBI data
The pound (GBP) fluctuated yesterday, although a stronger-than-expected distributive trades survey from the Confederation of British industry (CBI) lent GBP modest support.
The survey showed a surprise rise in retail trade this month, raising hopes that sales picked up after April’s washout. However, signs of easing inflationary pressures may have offset the pound’s potential upside.
Today, UK economic data is absent from the calendar. As a result, Sterling may struggle to find a clear direction.
Euro (EUR) volatile amid ECB policy speculation
The euro (EUR) also faced choppy trade yesterday, as European Central Bank (ECB) interest rate cut bets infused the currency with volatility.
ECB policymaker Klaas Knot added his voice to a chorus of rate-setters signalling that the bank will cut rates next week. However, hotter-than-forecast German producer prices may have prompted some investors to rethink the ECB’s pace of policy loosening after the June meeting.
Looking ahead, EUR investors will be focused on Germany’s latest inflation figures this afternoon. If inflation in the Eurozone’s largest economy rose as expected in May, the euro could catch bids.
US dollar (USD) claws back losses following Fed comments
The US dollar (USD) started yesterday’s session on the back foot, slipping to a fresh two-month low against the pound, amid a cautiously optimistic market mood.
Hawkish comments from Federal Reserve policymaker Neel Kashkari helped USD rebound from its worst levels, as he said another rate hike is not completely ‘off the table’. However, his remarks had a limited impact on USD as Kashkari is not voting on Fed policy this year.
John Williams, another Fed policymaker, is due to speak this evening. If he strikes a more cautious tone than his colleague Kashkari, the ‘greenback’ may soften.
Canadian dollar (CAD) slips despite strong PPI reading
A sharp rise in Canadian producer prices in April failed to support the Canadian dollar (CAD) yesterday, amid bets that the Bank of Canada (BoC) could cut interest rates at its policy meeting next week.
Turning to today, a lack of Canadian data could leave the crude-linked ‘loonie’ to trade on oil prices. Could an uptick in oil boost CAD exchange rates?
Australian dollar (AUD) buoyed by hotter inflation
The Australian dollar (AUD) enjoyed modest success last night after Australia’s monthly CPI indicator for April unexpectedly edged up from 3.5% to 3.6%, rather than falling to 3.4%.
New Zealand dollar (NZD) slips as business confidence falls
The New Zealand dollar (NZD) struggled during the overnight session following a surprise decline in New Zealand business confidence in May.