Pound (GBP) muted amid data drought
The pound (GBP) traded without much direction on Thursday as a lack of UK economic releases kept the currency subdued.
Concerns around potential tax rises in the upcoming autumn budget also continued to weigh on GBP, leaving the pound trailing some of its stronger counterparts.
With few British data releases due before the weekend, GBP could remain adrift in the near term.
Euro (EUR) gains ground as dollar dips
The euro (EUR) advanced against several rivals yesterday, shrugging off underwhelming Eurozone data as the US dollar (USD) pulled back.
That said, EUR struggled to keep pace with riskier currencies as upbeat sentiment limited demand for the comparatively safe euro.
Today, weak German retail sales and rising unemployment could place pressure on the single currency, although a rebound in German inflation may offer some support in the afternoon.
US dollar (USD) eases despite GDP upgrade
The ‘greenback’ lost momentum on Thursday as improved risk appetite sapped safe-haven demand.
An upward revision to second-quarter GDP growth only reinforced the positive market tone, adding to the downside pressure on USD.
Attention now shifts to the release of the Federal Reserve’s preferred inflation gauge – the core PCE price index. If July’s reading signals stronger price growth, USD may find renewed backing.
Canadian dollar (CAD) volatile on competing drivers
The Canadian dollar (CAD) swung back and forth yesterday as oil price fluctuations, a weaker USD, and better-than-expected domestic wage growth each influenced the ‘loonie’.
All eyes today turn to Canada’s Q2 GDP figures. Analysts predict a slowdown in growth, which could see CAD come under pressure.
Australian dollar (AUD) lifted by surge in credit
The Australian dollar (AUD) gained ground overnight after July data revealed business credit rose 1.4% – the strongest expansion in several months.
This robust corporate borrowing adds weight to expectations that the Reserve Bank of Australia (RBA) will maintain a relatively tight policy stance.
New Zealand dollar (NZD) climbs alongside AUD
The New Zealand dollar (NZD) appreciated overnight, supported by improved risk appetite and its close correlation with AUD’s upward momentum.
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