Pound (GBP) slips despite stronger data
The pound (GBP) came under pressure yesterday, even though UK borrowing figures beat expectations and the services PMI delivered an upside surprise.
The robust performance in the services sector failed to reassure markets as the ongoing decline in employment weighed on sentiment. Meanwhile, although borrowing data was encouraging, it did little to ease concerns over the likelihood of tax rises in the autumn.
With no major UK releases scheduled today, GBP could struggle to find clear direction into the weekend.
Euro (EUR) retreats as optimism fades over Ukraine
The euro (EUR) initially gained some support after the Eurozone’s manufacturing PMI indicated unexpected growth in factory activity this month.
However, momentum quickly faded as hopes for a Russia-Ukraine peace breakthrough dimmed. A stronger US dollar (USD) also applied pressure, alongside a sharper-than-expected fall in Eurozone consumer confidence.
Germany’s final Q2 GDP print showed a larger-than-expected contraction in growth, which could weigh on the euro today. Meanwhile, EUR investors may continue to monitor headlines related to the war in Ukraine.
US Dollar (USD) climbs on robust PMIs
The US dollar faced a choppy session yesterday as risk-off sentiment and an uptick in jobless claims created mixed conditions.
Later in the day, the ‘greenback’ gained fresh traction after both the manufacturing and services PMIs showed stronger-than-anticipated expansions.
Attention now turns to Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium. Any indication of a softer stance on monetary policy could see USD slip back.
Canadian Dollar (CAD) pressured by oil downturn
The commodity-linked Canadian dollar (CAD) weakened yesterday as sliding oil prices dented demand. However, CAD managed to claw back some losses later in the session thanks to its close correlation with a stronger USD.
Markets will look to Canada’s July retail sales report today. Another decline in sales growth could drag CAD lower.
Australian Dollar (AUD) stuck in narrow range
The Australian dollar (AUD) traded flat overnight, as an uncertain risk environment kept the ‘Aussie’ confined to tight levels.
New Zealand Dollar (NZD) drifts lower amid muted mood
The New Zealand dollar (NZD) edged down as tepid market sentiment limited appetite for the risk-sensitive currency.
Never miss a movement. Create a free account with TorFX to get the latest currency news delivered straight to your inbox. You can also set up rate alerts and check live rates 24/7.