Pound (GBP) subdued ahead of BoE announcement
The pound (GBP) traded without clear direction on Wednesday, as investors braced for the Bank of England’s (BoE) latest policy decision.
With a quarter-point rate cut already priced in, market attention is firmly on the central bank’s forward guidance for the rest of 2025.
Should policymakers flag ongoing labour market weakness, it may signal a more dovish stance and drag GBP lower through the day.
Euro (EUR) struggles to extend gains amid weak data
The euro (EUR) saw modest gains midweek, buoyed by its inverse relationship with a softer US dollar (USD).
However, disappointing Eurozone economic indicators capped the upside, as German factory orders and retail sales figures underwhelmed.
Today’s industrial production release from Germany is likely to add to pressure to the euro after reporting a larger-than-expected decline in factory output in June.
US dollar (USD) dips on economic concerns
The US dollar slipped on Wednesday, under pressure from growing anxiety over the outlook for the US economy.
Adding to USD headwinds were reports that US President Donald Trump may soon name his Federal Reserve Chair nominee, raising uncertainty over the Fed’s policy path.
Attention now turns to weekly jobless claims. Any signs of softness in the labour market may reinforce expectations for rate cuts and dent the ‘greenback’.
Canadian dollar (CAD) stabilises on oil recovery
The Canadian dollar (CAD) traded in a narrow range on Wednesday, supported by a rebound in crude oil prices, which helped counteract trade-related concerns.
The upcoming Ivey PMI could act as a catalyst for CAD today, particularly if it reveals stronger momentum in Canada’s private sector in July.
Australian dollar (AUD) rises on upbeat trade data
The Australian dollar (AUD) climbed in overnight trade, after robust trade data showed a strong rebound in exports, lifting June’s trade surplus to its highest in three months.
New Zealand dollar (NZD) lifted by improved sentiment
The New Zealand dollar (NZD) also advanced overnight, benefiting from a pickup in global risk appetite, which supported demand for the risk-sensitive ‘kiwi’.
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