Pound (GBP) firms as sentiment improves
The pound (GBP) traded with modest gains yesterday as an upbeat mood underpinned Sterling sentiment.
However, the upside in GBP remained limited as investors continued to express concern over the UK’s fiscal outlook.
The UK’s PMIs might provide a boost for the pound today, as July’s preliminary figures are expected to report an acceleration of growth in the vital services sector.
Euro (EUR) slips ahead of ECB rate decision
The euro (EUR) weakened on Wednesday amid a sense of caution ahead of the European Central Bank’s (ECB) impending interest rate decision.
EUR demand was also suppressed by the Eurozone’s latest consumer confidence index, which reported morale remains downbeat.
The ECB’s rate decision will unsurprisingly be the focus of today’s session. No policy changes are expected, but the ECB’s guidance could bolster EUR exchange rates if the bank signals interest rates are close to neutral.
US dollar (USD) dips on US-Japan trade deal announcement
The US dollar (USD) trended lower through yesterday’s session as markets digested the latest trade developments.
While USD investors welcomed the trade deal with Japan, the resulting risk-on flows, coupled with US President Donald Trump’s continued criticism of Federal Reserve Chair Jerome Powell, weighed on USD demand.
Coming up, the focus for USD investors today will be the latest S&P PMIs. While not as influential as the ISM releases, the S&P indexes may lift the ‘greenback’ if they report an improvement in private sector growth this month.
Canadian dollar (CAD) undermined by weaker oil prices
The Canadian dollar (CAD) was muted on Wednesday as a softening of oil prices limited the appeal of the commodity-linked currency.
Canada’s latest retail sales figures could weigh on the ‘loonie’ later today as economists forecast another decline in sales growth last month.
Australian dollar (AUD) strengthens on impressive PMIs
The Australian dollar (AUD) strengthened against the majority of its peers overnight on Wednesday after Australia’s latest PMIs reported a surprisingly strong acceleration in private sector growth this month.
New Zealand dollar (NZD) buoyed by risk-on flows
The New Zealand dollar (NZD) also firmed in overnight trade amid robust risk demand.
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