Pound (GBP) drifts amid quiet calendar
The pound (GBP) lacked direction yesterday, with no notable UK economic data to guide trade.
As a result, the increasingly risk-sensitive currency responded to wider market sentiment, strengthening against some counterparts while slipping against others.
Sterling may continue to fluctuate without a clear trend today, with UK releases remaining thin until tomorrow’s GDP figures.
Euro (EUR) under pressure from French political uncertainty
The euro (EUR) remained subdued yesterday as political turbulence in France weighed on the single currency, following the resignation of Prime Minister François Bayrou on Tuesday.
A risk-on environment also dampened demand for the safer euro, causing it to lag behind riskier peers.
Attention now turns to the European Central Bank’s (ECB) policy announcement. If ECB President Christine Lagarde signals that further rate cuts are unlikely, EUR could regain some ground.
US dollar (USD) weakens after PPI surprise
The US dollar (USD) softened yesterday as a bullish market tone limited safe-haven demand.
A surprise dip in producer price inflation added to the downside pressure. However, USD’s losses were capped as traders held back ahead of today’s consumer price index.
With inflation forecast to have edged higher last month, the ‘greenback’ may rebound if expectations for Federal Reserve rate cuts are scaled back.
Canadian dollar (CAD) edges lower despite oil support
The commodity-linked Canadian dollar (CAD) slipped against several major peers yesterday, with modest gains in oil prices failing to counter CAD’s correlation with a softer USD.
In the absence of Canadian data today, CAD may continue to track movements in oil and the US dollar.
Australian dollar (AUD) retreats as sentiment shifts
The Australian dollar (AUD) pulled back overnight, slipping from multi-week highs. A deterioration in risk appetite, alongside some profit-taking, weighed on the risk-sensitive currency.
New Zealand dollar (NZD) eases amid fading risk appetite
The New Zealand dollar (NZD) also lost ground overnight, dragged lower by waning demand for higher-risk assets.
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