Pound (GBP) firms despite data lull
The pound (GBP) edged higher yesterday, with the UK currency finding support in spite of an absence of domestic data.
Sterling may have been buoyed by Bank of England (BoE) interest rate expectations, as rising oil prices fuelled speculation that the central bank could be more likely to raise rates.
Looking ahead, UK economic releases remain limited today. As a result, the pound may struggle to find a clear directional bias.
Euro (EUR) mixed ahead of ECB decision
The euro (EUR) traded without a clear direction yesterday, as a lack of Eurozone economic data left the single currency short of support.
EUR movement was also subdued as investors hesitated to make any bold moves ahead of today’s European Central Bank (ECB) interest rate decision.
The common currency could strengthen today if the ECB raises interest rates as expected. However, the bank’s forward guidance is likely to be the key focus. Could a hawkish outlook see EUR climb?
US dollar (USD) wavers despite hotter inflation
The US dollar (USD) struggled yesterday, with the currency unable to benefit from either the risk-off market mood or a rise in US inflation.
The latest consumer price index showed headline inflation accelerating from 3.8% to 4.2% in May. However, core inflation only ticked up from 2.8% to 2.9%, doing little to bolster Federal Reserve interest rate hike bets and leaving USD without much support.
Middle East developments may drive USD movement today. The ‘greenback’ could strengthen if persistent concerns over escalating tensions dampen market risk appetite.
Canadian dollar (CAD) supported by stronger oil prices
The crude-linked Canadian dollar (CAD) gained ground yesterday amid rising oil prices, although CAD later pared some of its gains after the Bank of Canada (BoC) struck a balanced tone following its latest interest rate decision.
Oil price dynamics could shape ‘loonie’ movement today. CAD may trend higher if renewed fighting in the Middle East drives crude prices upward.
Australian dollar (AUD) hits fresh lows amid gloomy mood
The Australian dollar (AUD) struck fresh multi-month lows overnight, pressured by a surprise drop in Australian consumer inflation expectations and a cautious market mood.
New Zealand dollar (NZD) stumbles as risk appetite falters
The New Zealand dollar (NZD) weakened broadly last night as geopolitical uncertainty continued to weigh on market risk appetite.
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