Pound (GBP) subdued ahead of UK CPI
The pound (GBP) was mixed yesterday as a lack of UK data left the currency trading without a clear direction.
In addition, GBP investors were reluctant to place any aggressive bets ahead of this morning’s consumer price index.
The CPI figures have helped Sterling strengthen at the start of today’s session, as headline inflation held at 2%, rather than dipping to 1.9% as expected. This, paired with sticky services inflation, has seen markets trim bets on an August interest rate cut from the Bank of England (BoE).
Euro (EUR) stifled by weaker German data
The euro (EUR) struggled to attract support yesterday after Germany’s latest ZEW economic sentiment index reported a larger-than-expected decline this month.
Morale in the Eurozone’s largest economy fell sharply to its lowest level in four months, which left EUR exchange rates mostly muted.
Turning to today, the Eurozone’s final inflation figures are unlikely to trigger much movement unless they deviate from the preliminary estimate. As a result, EUR could trade mixed today.
US dollar (USD) rallies following retail sales report
The US dollar (USD) firmed yesterday after the latest US retail sales data beat forecasts.
Although sales growth stalled in June, as expected, an upward revision from 0.1% to 0.3% in May was enough to lift the ‘greenback’.
Looking ahead, two Federal Reserve policymakers are due to speak tonight. Both are considered relatively hawkish. Could their comments provide USD with support?
Canadian dollar (CAD) shrugs off cooling inflation
The Canadian dollar (CAD) seemed unfazed by cooler-than-forecast Canadian inflation yesterday. While the headline rate unexpectedly fell, a surprise rise in core inflation offset the downside.
Meanwhile, CAD’s positive correlation with USD provided the ‘loonie’ with some support.
Today, with Canadian data thin on the ground, oil price dynamics could drive the crude-linked Canadian dollar.
Australian dollar (AUD) subdued in absence of data
The Australian dollar (AUD) was muted overnight as a cautious market mood and lack of Australian data left the currency rudderless.
New Zealand dollar (NZD) rises despite cooler inflation
The New Zealand dollar (NZD) firmed overnight, despite New Zealand inflation cooling more than forecast in the second quarter. Rising services inflation seemed to dent bets that the Reserve Bank of New Zealand (RBNZ) may start considering interest rate cuts.