Pound (GBP) weakens ahead of BoE decision
The pound (GBP) trended lower yesterday, with the UK currency losing ground ahead of the Bank of England’s (BoE) interest rate decision tomorrow.
Although the bank is expected to leave interest rates unchanged, recent weak UK data has opened up the slight possibility of a rate cut at this month’s meeting, which weighed on Sterling.
This morning, the pound is attempting to recoup some losses following the UK’s consumer price index, which showed that inflation cooled but remained well above the BoE’s target in May. However, Sterling’s recovery seems limited.
Euro (EUR) unsure despite upbeat German data
The euro (EUR) was mixed yesterday, despite Germany’s latest ZEW economic sentiment index smashing forecasts to show a strong improvement this month.
Despite this upbeat data, EUR came under pressure as Donald Trump said the EU was not yet offering a ‘fair deal’ on trade and again threatened to impose unilateral tariffs.
The Eurozone’s finalised inflation figures could pressure EUR today if they confirm inflation eased to 1.9% in May, although movement may be limited unless the rate is revised higher or lower.
US dollar (USD) rallies as sentiment sours
The US dollar (USD) initially wavered yesterday as the uncertain market mood kept the safe-haven ‘greenback’ fluctuating in a narrow range.
However, with the market mood souring as the session went on, the US dollar was able to rally in the afternoon. USD even brushed off some weak US retail sales and industrial production data.
Turning to today, the latest US initial jobless claims figure could impact USD, although the Federal Reserve’s decision this evening is the main focus. If the Fed maintains its hawkish stance, USD could climb.
Canadian dollar (CAD) rebounds in lockstep with USD
The crude-linked Canadian dollar (CAD) traded in tandem with its US counterpart yesterday, with CAD initially subdued but rallying in the afternoon. A rise in oil prices also helped to underpin the ‘loonie’.
Canadian data is absent from the calendar today, meaning oil prices may influence the direction of the ‘loonie’.
Australian dollar (AUD) buoyed by commodity prices
The Australian dollar (AUD) ticked higher overnight, despite an uncertain market mood, as rising commodities prices lifted the resource-linked ‘Aussie’.
New Zealand dollar (NZD) wobbles amid mixed mood
The New Zealand dollar (NZD) wavered overnight, as the mixed market mood confined NZD to a narrow range.
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