Pound (GBP) unclear amid data lull
The pound (GBP) moved within a wide range yesterday, as an absence of UK economic data left GBP lacking a clear trajectory.
Sterling also faced uncertainty ahead of several high-impact events later in the week, including new UK data, the Bank of England’s (BoE) interest rate decision, and the Makerfield by-election.
This morning, Sterling slipped after the UK’s latest consumer price index came in softer than expected. Headline inflation held at 2.8%, instead of rising to 3% as forecast, cooling BoE interest rate hike expectations.
Euro (EUR) lifted by upbeat German data
The euro (EUR) strengthened against many of its rivals yesterday, supported by stronger-than-forecast German economic data.
Germany’s latest ZEW economic sentiment index climbed from -10.2 to 10.5, beating forecasts of -6 and marking its first positive reading since the US-Iran war began in March.
Looking ahead, European Central Bank (ECB) President Christine Lagarde is scheduled to speak today. Any hawkish comments could help underpin the euro.
US dollar (USD) weakens as risk appetite improves
The safe-haven US dollar (USD) edged lower yesterday as a cautiously optimistic mood returned to markets, with some shipping traffic resuming through the Strait of Hormuz.
However, concerns over Israel’s ongoing offensive in Lebanon kept risk appetite in check, limiting USD’s losses.
Turning to today, the latest US retail sales figures could drive movement in the ‘greenback’. Another month of solid sales growth may lift USD, although movement could be restrained ahead of this evening’s Federal Reserve interest rate decision.
Canadian dollar (CAD) dented by weaker oil prices
The commodity-linked Canadian dollar (CAD) fell yesterday, striking four-month lows against GBP and EUR, as crude prices continued to slide.
With Canadian economic data in short supply today, oil price movements may remain the main driver of CAD. If crude prices extend their losses, the ‘loonie’ could soften further.
Australian dollar (AUD) ticks lower amid RBA repricing
The Australian dollar (AUD) edged lower overnight, as markets continued to pare back Reserve Bank of Australia (RBA) interest rate hike bets following the bank’s latest policy meeting.
New Zealand dollar (NZD) slides as consumer morale deteriorates
The New Zealand dollar (NZD) weakened overnight after New Zealand’s consumer confidence index reported a sharper-than-expected decline in sentiment in the second quarter.
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