Pound (GBP) muted amid BoE speculation
The pound (GBP) traded sideways through yesterday’s session as GBP investors continued to adjust their bets for a potential Bank of England (BoE) interest rate cut next month.
This followed a flood of high-impact UK economic data last week, which despite being mostly positive, was not enough to weaken bets for back-to-back rate cuts from the BoE.
In the absence of any UK economic data, the pound may struggle to find direction during today’s session.
Euro (EUR) subdued in risk-positive trade
The euro (EUR) was muted during yesterday’s session as the upbeat market mood limited demand for the safe-haven currency.
Furthermore, a lull in Eurozone data also left EUR investors with limited trading stimuli on Monday.
Looking ahead, the Eurozone will publish its latest consumer price index later this morning. July’s finalised figures are expected to confirm an acceleration of inflation in the bloc, which may underpin the euro.
US dollar (USD) undermined by dovish Fed remarks
The US dollar (USD) trended lower at the start of this week, with the currency striking new multi-month lows against a few of its peers.
The latest drop in the ‘greenback’ appeared linked to remarks from Federal Reserve policymaker Mary Daly, who called for a gradual cutting of US interest rates amid signs that inflation is under control.
The Fed’s Rahael Bostic and Michael Barr are set to speak later today. If they strike a similar tone to Daly, it may extend the USD selling bias.
Canadian dollar (CAD) muted as oil prices slide
The Canadian dollar (CAD) was muted on Monday as the appeal of the commodity-linked currency was undermined by a fall in oil prices
Coming up, Canada will publish its latest CPI figures this afternoon. If inflation slows as forecast, it may stoke Bank of Canada (BoC) rate cut bets and drag on the ‘loonie’.
Australian dollar (AUD) muted following RBA minutes
The Australian dollar (AUD) was mostly subdued overnight on Monday after the minutes from the Reserve Bank of Australia’s (RBA) latest policy meeting indicated that another rate hike would only be warranted if there was a ‘material’ risk to inflation.
New Zealand dollar (NZD) firms in risk-on trade
The New Zealand dollar (NZD) trended broadly higher overnight as the risk-sensitive currency was underpinned by an upbeat mood.