Pound (GBP) wavers following mixed inflation figures
The pound (GBP) initially rose yesterday despite the latest UK consumer price index reporting that headline inflation cooled to 2% in May, reaching the Bank of England’s (BoE) target.
Signs of sticky services inflation supported GBP, as markets adjusted their bets on future rate cuts from the BoE. However, Sterling trimmed its gains later in the session.
Today, the BoE is set to leave rates unchanged at its policy decision. The looming UK election could mean the bank is reluctant to offer forward guidance. Nevertheless, any hints that it may start cutting rates in August could weigh on the pound.
Euro (EUR) muted in absence of data
The euro (EUR) was subdued yesterday as a lack of Eurozone economic data left the currency lacking support.
In addition, a cautiously upbeat market mood added to the safe-haven euro’s muted movements.
Weaker German producer price inflation seems to have applied some pressure to the euro this morning. Later this afternoon, could an expected uptick in Eurozone consumer confidence lend EUR some support?
US dollar (USD) subdued amid recovering risk appetite
The US dollar (USD) softened slightly yesterday as a modest improvement in risk appetite put some pressure on the safe-haven currency.
Meanwhile, a lack of US economic data also subdued the ‘greenback’.
Looking ahead, last week’s initial jobless claims figure from the US is out this afternoon. If new claims once again come in relatively high, USD could stumble.
Canadian dollar (CAD) wobbles amid choppy oil prices
The crude-sensitive Canadian dollar (CAD) wobbled yesterday, with the currency trading in line with wavering oil prices.
With Canadian economic data absent from the calendar today, oil price dynamics could continue to drive CAD exchange rates.
Australian dollar (AUD) holds steady amid quiet trade
The Australian dollar (AUD) traded sideways overnight, holding near one-week highs against some peers, as a mixed market mood and lack of Australian economic data kept the currency trapped in a narrow range.
New Zealand dollar (NZD) unmoved by positive GDP
The New Zealand dollar (NZD) failed to strengthen last night despite unexpectedly positive data. New Zealand GDP expanded 0.2% in the first quarter of 2024, rather than stalling as expected, but this did not move the needle on NZD.