Pound (GBP) buoyed by upbeat UK GDP
The pound (GBP) attracted some bids yesterday thanks to a solid 0.6% expansion in the UK economy in the second quarter.
However, Sterling’s upside potential was limited as Wednesday’s weaker inflation reading continued to fuel expectations that the Bank of England (BoE) could cut interest rates again next month.
Looking ahead, Sterling could garner some support this morning as the UK’s latest retail sales data reported a recovery in domestic sales growth last month.
Euro (EUR) slides amid risk-on mood and USD strength
The euro (EUR) faced headwinds yesterday, with demand for the safer single currency faltering amid an increased appetite for risk.
EUR suffered further losses later in the session amid a sharp uptick in the US dollar (USD), due to the euro’s strong negative correlation with the American currency.
With Eurozone economic data remaining thin on the ground during today’s session, risk appetite and USD movement may continue to influence EUR exchange rates.
US dollar (USD) finds support as sales beat forecasts
A cheery market mood initially dampened the safe-haven US dollar’s appeal yesterday, causing it to soften against its riskier rivals.
A stronger-than-forecast 1% rebound in US retail sales in July then saw the ‘greenback’ jump higher in the afternoon. However, the prevailing risk-on mood remained a thorn in the US dollar’s side, limiting its gains against some peers.
Looking at the session ahead, the latest US consumer sentiment index from the University of Michigan is in focus for USD. Could an expected improvement in morale support the US dollar?
Canadian dollar (CAD) trades alongside USD
A lack of data saw the Canadian dollar (CAD) trade in tandem with the US dollar yesterday, due to CAD’s increasingly strong correlation with USD.
The drought of Canadian data continues today, potentially leaving the ‘loonie’ to once again be influenced primarily by USD movement.
Australian dollar (AUD) boosted by risk-positive trade
The risk-sensitive Australian dollar (AUD) rose overnight as a cheery mood swept markets.
New Zealand dollar (NZD) climbs on stronger-than-forecast data
The New Zealand dollar (NZD) also gained ground last night. The latest New Zealand manufacturing PMI printed higher than expected, while stronger-than-forecast producer prices may have dampened bets on another rate cut from the Reserve Bank of New Zealand (RBNZ).