Pound (GBP) dips after lacklustre PMIs
The pound (GBP) came under pressure on Thursday following disappointing PMI data, which showed an unexpected deceleration in UK service sector activity.
Investors were also spooked by the uptick in job losses across the services industry, which fuelled speculation that the Bank of England (BoE) may opt for further interest rate cuts.
More headwinds may lie ahead for Sterling today after UK retail sales came in below expectations. While June saw a return to growth, it was weaker than forecast, and May’s decline was revised even deeper.
Euro (EUR) climbs as ECB adopts hawkish tone
The euro (EUR) initially faltered yesterday, weighed down by upbeat risk sentiment that offset encouraging PMI figures.
However, the single currency bounced back after the European Central Bank (ECB) held interest rates steady and ECB President Christine Lagarde delivered a relatively hawkish message during her post-decision remarks.
Today, attention turns to Germany’s Ifo business climate survey. A forecast improvement to the highest reading since April 2024 could help underpin the euro.
US dollar (USD) subdued despite strong PMI
The US dollar (USD) remained under pressure on Thursday as a risk-on mood continued to drag on demand for the safe-haven currency.
The ‘greenback’ did manage to pare some losses during European trade after the latest S&P services PMI significantly exceeded expectations, though overall momentum remained limited.
Looking ahead, durable goods orders from the US could drive movement today. A sharp decline in order volumes is projected, which may weigh on USD exchange rates.
Canadian dollar (CAD) mixed despite upbeat domestic data
The Canadian dollar (CAD) delivered a mixed performance yesterday, climbing against softer currencies but struggling to capitalise more broadly despite higher oil prices and a solid rebound in retail sales.
Today, the ‘loonie’ could react to fluctuations in oil markets and any updates on trade relations between Canada and the US.
Australian dollar (AUD) slips as sentiment sours
The Australian dollar (AUD) lost ground in overnight trade, as a downturn in market sentiment dampened demand for the risk-sensitive currency.
New Zealand dollar (NZD) retreats alongside risk aversion
The New Zealand dollar (NZD) also weakened overnight, tracking the broader decline in risk appetite that pulled the ‘kiwi’ lower.
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