Pound (GBP) gains on stronger labour market report
The pound (GBP) advanced yesterday after UK jobs data came in stronger than anticipated, prompting markets to further scale back expectations for additional Bank of England (BoE) interest rate cuts.
While the figures still showed signs of a cooling labour market, the slowdown was less severe than feared, supporting the pound.
Looking ahead, GBP may trade cautiously today as investors await tomorrow’s UK GDP release, which could put the currency under pressure if growth disappoints.
Euro (EUR) rebounds despite weak German sentiment
The euro (EUR) started yesterday on the back foot after German economic sentiment fell more sharply than expected in August.
However, the single currency staged a strong afternoon recovery, buoyed by a steep decline in the US dollar (USD).
With Germany’s final July inflation reading confirming preliminary estimates, EUR is likely to take its cues today from USD movements and developments in Ukraine.
US dollar (USD) tumbles on Fed independence concerns
The US dollar slumped yesterday after US President Donald Trump renewed attacks on Federal Reserve Chair Jerome Powell, following a softer-than-expected US consumer price index.
Inflation held steady at 2.7% in July instead of rising to the forecast 2.8%, prompting Trump to post on social media he was ‘considering allowing a major lawsuit against Powell to proceed’. The remarks stoked worries over the Fed’s independence.
Those concerns deepened last night after US Treasury Secretary Scott Bessent called for a 50bps rate cut at the next Fed meeting, creating headwinds for USD at the start of today’s session.
Canadian dollar (CAD) weighed down by falling oil prices
The crude-linked Canadian dollar (CAD) slipped yesterday, pressured by weaker oil prices and a declining US dollar.
Oil market movements are likely to remain the primary driver for CAD today, with further price weakness set to keep the currency under strain.
Australian dollar (AUD) trades in mixed range
The Australian dollar (AUD) moved without a clear direction overnight amid muted data releases and a mixed risk environment.
New Zealand dollar (NZD) supported by stronger spending data
The New Zealand dollar (NZD) found support from an unexpected rise in July credit card spending, hinting at more resilient domestic consumption and lending some strength to NZD in overnight trade.
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