Pound (GBP) marches higher following UK CPI
The pound (GBP) strengthened yesterday after the UK’s latest consumer price index saw markets trim bets on an August interest rate cut from the Bank of England (BoE).
Headline inflation held at 2%, rather than dipping to 1.9% as forecast, while services inflation unexpectedly ticked higher. This dampened bets on a BoE rate cut next month, thereby boosting Sterling.
Turning to today, the latest UK employment data is putting some pressure on the pound. A slowdown in wage growth has revived bets on a possible August rate cut.
Euro (EUR) firms despite easing inflation
The euro (EUR) ticked higher yesterday, despite the final Eurozone inflation figures confirming that price pressures cooled in June.
The upside seemed to come courtesy of the euro’s strong negative correlation with the US dollar (USD), as the ‘greenback’ faced selling pressure.
Today, EUR investors will undoubtedly be focused on the European Central Bank’s (ECB) interest rate decision. While no changes are expected, any hints about its future policy plans could impact the common currency.
US dollar (USD) slips amid Fed rate cut bets
The US dollar softened yesterday as bets on a September rate cut from the Federal Reserve continued to apply pressure to USD exchange rates.
However, the ‘greenback’ was able to claw back some losses in the afternoon after US industrial production data beat forecasts. Output in June exceeded expectations, while May’s figure was also revised higher.
Looking ahead, the latest US initial jobless claims figure is due out this afternoon. Could an uptick in new unemployment claims last week stoke Fed rate cut bets and drag USD lower?
Canadian dollar (CAD) falls despite stronger oil prices
Rising oil prices failed to lift the crude-linked Canadian dollar (CAD) yesterday, as CAD’s positive correlation with USD weighed heavily on the currency.
With Canadian economic data still absent from the calendar today, US dollar movement could once again influence the ‘loonie’.
Australian dollar (AUD) wavers following mixed jobs data
The Australian dollar (AUD) initially slipped before bouncing back last night following a mixed Australian jobs report. Although the unemployment rate rose, an increase in participation and the number of new jobs seemed to offset the downside.
New Zealand dollar (NZD) subdued amid mixed mood
The New Zealand dollar (NZD) was muted last night, stumbling against its stronger peers, amid a mixed market mood and lack of NZD data.