Pound (GBP) rises amid hopes for Labour government
Investors in the pound (GBP) reacted positively to the new UK government’s first actions in office, as the Labour Party pressed ahead with its plans to boost growth.
Also supporting Sterling were hawkish comments from outgoing Bank of England (BoE) policymaker Jonathan Haskel. Haskel said that he would ‘rather hold rates’ at the bank’s August meeting, rather than cutting them.
Turning to today, UK economic data is in short supply. As a result, movement in the pound may be muted.
Euro (EUR) choppy after French election surprise
The euro (EUR) was volatile on Monday after the second round of the French parliamentary election saw the far-right National Rally (RN) party finish third, behind the centrist coalition and an alliance of left-wing parties.
EUR investors were relieved that RN had not won power, due to the party’s ‘unsustainable’ fiscal policies. However, the political uncertainty of a hung parliament offset the euro’s upside potential.
With EUR data absent today, French politics could continue impacting the euro. Will worries of political paralysis in the Eurozone’s second-largest economy begin to weigh on the single currency?
US dollar (USD) subdued amid Fed rate cut bets
The US dollar (USD) was muted at the start of the week, with the ‘greenback’ hovering near recent lows amid a lack of American economic data.
A wobbly market mood failed to provide the safe-haven currency with support, with expectations of a September rate cut from the Federal Reserve keeping the US dollar on the back foot.
This afternoon, Fed Chair Jerome Powell will testify in front of US Congress. Could dovish comments from the central bank chief see USD stumble?
Canadian dollar (CAD) struggles amid softer oil prices
The crude-linked Canadian dollar (CAD) was also subdued yesterday, although it resisted steeper losses despite weaker oil prices.
Canadian economic data is in short supply today. Therefore, oil prices may drive most movement in the ‘loonie’.
Australian dollar (AUD) wobbles on mixed data releases
The Australian dollar (AUD) wavered overnight amid mixed data. While Australian consumer confidence missed forecasts for July, business confidence in June unexpectedly improved.
New Zealand dollar (NZD) stumbles ahead of RBNZ decision
The New Zealand dollar (NZD) softened slightly overnight as caution ahead of the Reserve Bank of New Zealand’s (RBNZ) upcoming interest rate decision muted the ‘kiwi’.