Pound (GBP) stumbles as UK election cheer fades
The pound (GBP) was initially rangebound yesterday as the optimism around the recent UK election and Labour’s landslide victory began to wear off.
In the afternoon, Sterling then stumbled without a clear catalyst for the movement. Profit-taking may have undermined GBP.
Turning to today, the spotlight could fall on an upcoming speech from Bank of England (BoE) Chief Economist Huw Pill. Any indication that Pill is leaning towards an interest rate cut in August could dent GBP.
Euro (EUR) subdued amid absence of data
The euro (EUR) was also muted yesterday as a lack of Eurozone data and French political jitters subdued the single currency.
France’s recent election resulted in a hung parliament, raising concerns that a political deadlock could cause trouble in the Eurozone’s second-largest economy.
During today’s session, the focus could remain on French politics as Eurozone data is once again absent from the calendar. As a result, EUR may be muted.
US dollar (USD) firms amid Fed Powell comments
The US dollar (USD) edged higher yesterday as a slight uptick in US Treasury yields supported the ‘greenback’.
Comments from Federal Reserve Chair Jerome Powell further boosted USD in the afternoon. Powell warned against cutting interest rates too soon, saying the bank wanted more evidence that inflation is easing.
This afternoon, Powell is due to speak again, followed in the evening by a speech from policymaker Michelle Bowman. Could more hawkish comments boost the US dollar?
Canadian dollar (CAD) rangebound amid lack of data
Amid an absence of domestic data yesterday, the Canadian dollar (CAD) was impacted by its positive correlations with both the US dollar and oil prices. A stronger USD underpinned CAD, but flat oil prices stifled its upside.
Canadian data remains in short supply today. Therefore, the crude-linked Canadian dollar may trade in tandem with oil prices.
Australian dollar (AUD) flat amid quiet trading conditions
The Australian dollar (AUD) was muted overnight amid a cautious mood and a lack of Australian data.
New Zealand dollar (NZD) plunges following RBNZ decision
The New Zealand dollar (NZD) slumped last night following the Reserve Bank of New Zealand’s (RBNZ) latest interest rate decision. While the bank held rates, as expected, it struck a surprisingly dovish tone in its accompanying statement.