Pound (GBP) struggles ahead of BoE decision
The pound (GBP) was on the back foot yesterday as a lack of UK economic data left Sterling vulnerable to losses.
In addition, some last-minute bets that the Bank of England (BoE) will cut interest rates at its meeting tomorrow seemed to pressure the pound.
Turning to today, Sterling could remain subdued as GBP investors brace for the BoE monetary policy decision.
Euro (EUR) muted despite upbeat GDP
The euro (EUR) struggled to attract support yesterday, despite the Eurozone’s latest GDP data showing a larger-than-expected economic expansion in the second quarter.
Q2 GDP growth printed at 0.3%, above forecasts of 0.2%. However, with the Eurozone consumer price index looming, EUR movement was limited.
Forecasters expect today’s CPI figures to show that both headline and core inflation cooled this month. If the data prints as expected, the common currency could slide.
US dollar (USD) buoyed by positive data
The US dollar (USD) strengthened yesterday as June’s JOLTs job openings figure printed higher than expected and May’s reading was revised upwards.
In addition, the latest US consumer confidence index showed that household morale improved more than forecast in July.
The spotlight for the session ahead is undoubtedly on the Federal Reserve’s interest rate decision this evening. If the Fed signals that a rate cut in September is likely, the ‘greenback’ could come under pressure.
Canadian dollar (CAD) enjoys USD correlation
The crude-linked Canadian dollar (CAD) shrugged off a decline in oil prices yesterday, with the ‘loonie’ rising against many of its peers thanks to its positive correlation with the US dollar.
Canada’s latest GDP data is the focus for investors today. Could anaemic economic growth in May and June put the Canadian dollar on the defensive?
Australian dollar (AUD) plummets as domestic inflation cools
The Australian dollar (AUD) faced heavy selling pressure overnight on Tuesday, after Australia’s latest monthly consumer price index reported that domestic inflation cooled in May, weakening the case for the Reserve Bank of Australia (RBA) to hike interest rates in the coming months.
New Zealand dollar (NZD) underpinned by positive business confidence
The New Zealand dollar (NZD) firmed in overnight trade as the currency was supported by a surprisingly strong upswing in domestic business confidence this month.