Pound (GBP) sidelined by BoE rate cut speculation
The pound (GBP) traded in a narrow range at the end of last week, amid Bank of England (BoE) interest rate speculation.
As the BoE prepares to deliver its latest interest rate decision on Thursday, GBP investors remain split on whether the bank will cut interest rates.
Coming up, the UK’s new Chancellor Rachel Reeves is set to deliver a statement to Parliament at the start of this week outlining the state of the UK’s public finances. Will concerns over a £20bn ‘black hole’ spook GBP investors?
Euro (EUR) firms as inflation expectations stabilise
The euro (EUR) edged higher on Friday in response to the European Central Bank’s (ECB) latest consumer expectations survey.
The poll found that consumers expect inflation to average 2.8% over the next 12 months. This was in unchanged from May’s survey and broke four months of consecutive falls.
Looking ahead, movement in the euro is likely to be limited at the start of this week as EUR investors brace for the release of the Eurozone’s latest GDP figures on Tuesday.
US dollar (USD) muted despite stronger-than-expected inflation
The US dollar (USD) was subdued at the end of last week’s session, despite the latest core PCE price index printing above expectations.
While the Federal Reserve’s preferred measure of inflation outpaced forecasts last month, USD investors shrugged off the data, amid expectations that it is unlikely to dissuade the Fed from pursuing an interest rate cut in September.
The Fed will deliver its latest interest rate decision later this week. While no policy changes are expected from the bank this month, its forward guidance could trigger some notable volatility on Wednesday.
Canadian dollar (CAD) undermined by siding oil prices
The Canadian dollar (CAD) struggled to attract support on Friday amid a continued pullback in oil prices.
In the absence of any notable domestic data, movement in the ‘loonie’ is likely to remain tied to oil price dynamics at the start of this week.
Australian dollar (AUD) wavers in mixed trade
The Australian dollar (AUD) was listless in overnight trade as a mixed market mood left the ‘Aussie’ without a clear directional bias.
New Zealand dollar (NZD) struggles for direction
Movement in the New Zealand dollar (NZD) mirrored that of its antipodean cousin overnight amid the mixed market mood.