Pound (GBP) weakens as UK wage growth cools
The pound (GBP) stumbled yesterday, retreating from recent multi-month highs, following the latest UK labour market report.
British wage growth cooled in the three months to May, as expected, reviving bets on a Bank of England (BoE) interest rate cut in August.
This morning, new UK retail data revealed a surprisingly large contraction in sales growth in May. Could this sharp decline in consumer spending see Sterling end the week on a sour note?
Euro (EUR) slips following ECB decision
The euro (EUR) softened yesterday in the wake of the European Central Bank’s (ECB) interest rate decision.
While the bank left rates unchanged, as expected, ECB President Christine Lagarde said that a rate cut in September was ‘wide open’, which put pressure on the single currency.
Turning to today, market-moving Eurozone data is absent from the calendar. Therefore the euro may trade without a clear direction.
US dollar (USD) ticks higher despite weaker jobs data
The US dollar (USD) managed to firm against some of its weaker rivals yesterday, despite the latest initial jobless claims figure showing a larger-than-forecast rise in new unemployment benefits claims last week.
USD’s initial upside seemed to come as the ‘greenback’ entered oversold conditions, before a solid rise in US Treasury bond yields in the evening helped the US dollar gain more ground.
Later today, two Federal Reserve policymakers are due to speak. Could hints of a coming interest rate cut see USD end the week on a sour note?
Canadian dollar (CAD) mixed on USD and oil correlations
The Canadian dollar (CAD) was mixed yesterday as the currency’s positive correlations with a rising US dollar and falling oil prices pulled the currency in different directions.
We could see CAD exchange rates face selling pressure this afternoon, as Canada’s latest retail data is expected to report a drop in domestic sales in May.
Australian dollar (AUD) muted amid quiet trade
The Australian dollar (AUD) was subdued overnight as a cautious market mood and lack of domestic data left the ‘Aussie’ struggling to attract support.
New Zealand dollar (NZD) extends losses amid RBNZ speculation
The New Zealand dollar (NZD) slipped to multi-month lows last night as the recent rise in Reserve Bank of New Zealand (RBNZ) rate cut bets continued to pressure the ‘kiwi’.