Pound (GBP) stumbles on BoE rate cut bets
The pound (GBP) came under pressure on Thursday amid a hardening of Bank of England (BoE) rate cut bets.
Despite last week’s stronger-than-expected UK inflation figures and some hawkish remarks from BoE Chief Economist Huw Pill, the majority of economists polled by Reuters still expect the bank to cut rates next week.
In the absence of any notable UK data, will the pound be left to trade without direction through to the end of the week?
Euro (EUR) firms despite deterioration in German business morale
The euro (EUR) strengthened during yesterday’s session, with EUR investors seemingly shrugging off Germany’s underwhelming IFO business climate index.
A third consecutive decline in morale saw July’s index fall to its worst levels since February, as the outlook in most sectors of the economy deteriorated amid concern over Germany’s economic health.
Looking ahead, will a continued decline in Eurozone consumer inflation expectations drag on the euro through the end of this week’s session.
US dollar (USD) underpinned by US GDP figures
The US dollar (USD) trended broadly higher yesterday, after the latest US GDP figures reported the US economy expanded at a faster-than-expected pace in the second quarter.
However, the US dollar’s gains proved modest in scope, as accompanying data reported a startling plunge in US durable goods orders last month.
Closing out this week is the publication of the latest core PCE price index. Will a drop in the Federal Reserve’s preferred indicator for inflation lead the ‘greenback’ to relinquish some of yesterday’s gains?
Canadian dollar (CAD) knocked by softer oil prices
The Canadian dollar (CAD) was pulled in two directions on Thursday. While the currency’s positive correlation with the US dollar proved a source of strength, this was offset by a slump in oil prices.
Looking ahead, the ‘loonie’ could face an uphill battle today if the recent downtrend in oil prices persists through to the end of the week.
Australian dollar (AUD) rebounds from multi-month low
The Australian dollar (AUD) edged higher in overnight trade, with the ‘Aussie’ recovering from Thursday’s multi-month low amid suggestions the currency may have been oversold.
New Zealand dollar (NZD) muted in cautious trade
The New Zealand dollar (NZD) remained subdued overnight on Thursday as a bearish market mood limited the appeal of the risk-sensitive currency.