Pound (GBP) softens amid dovish BoE outlook
The pound (GBP) remained under pressure on Monday after Bank of England (BoE) Governor Andrew Bailey struck a cautious tone.
In an interview with The Times, Bailey hinted that sharper rate reductions could be warranted if signs of weakness in the UK job market persist.
Looking to today’s session, Sterling may remain rangebound as traders await a string of high-impact UK data later in the week.
Euro (EUR) rattled by renewed trade friction
The euro (EUR) faltered at the start of the week, weighed down by a fresh round of US tariff threats from President Donald Trump.
Despite diplomatic efforts between Brussels and Washington, Trump announced a 30% levy on EU imports from 1 August.
Later today, Germany will release its ZEW economic sentiment report. A continued recovery in business morale may offer some relief for EUR.
US dollar (USD) lifted by safe-haven demand
The US dollar (USD) advanced on Monday as cautious market sentiment drove demand for the greenback.
The rally gained momentum after Trump pledged to impose ‘very severe’ sanctions on Russia, including secondary tariffs targeting nations that continue importing Russian oil.
Markets now turn to the June US CPI report, expected to show inflation reached a four-month high, likely dampening Federal Reserve rate cut bets and reinforcing USD strength.
Canadian dollar (CAD) holds steady as crude rises
The Canadian dollar (CAD) was little changed on Monday, finding support from higher oil prices despite lingering concerns over US-Canada trade relations.
Investors are also eyeing Canada’s upcoming CPI report. Inflation is projected to rise for the first time since February but stay under the 2% mark, which could reinforce dovish Bank of Canada (BoC) expectations and weigh on the ‘loonie’.
Australian dollar (AUD) dips on mixed Chinese data
The Australian dollar (AUD) drifted lower during Asian trade as China posted Q2 GDP figures that beat forecasts, while retail sales underwhelmed.
New Zealand dollar (NZD) rangebound despite upbeat China GDP
The New Zealand dollar (NZD) was flat overnight as market sentiment stayed cautious, despite China’s second-quarter growth coming in above expectations.
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