Pound (GBP) muted amid sparse data calendar
The pound (GBP) traded without much momentum yesterday, with Sterling weakening against stronger counterparts as the absence of notable UK economic releases left it lacking support.
Remarks from Bank of England (BoE) Governor Andrew Bailey also failed to lift the currency after he highlighted the UK’s persistent challenge of weak long-term economic growth.
There is little in the way of UK data again today, which could leave the pound trading in a narrow range without a clear catalyst.
Euro (EUR) supported by inverse USD relationship
The euro (EUR) also experienced a quiet session yesterday, with the relatively safe single currency finding limited demand amid unexpectedly upbeat market sentiment.
Even so, EUR recovered later in the day as the US dollar (USD) came under heavy pressure, allowing the euro to benefit from its inverse correlation with the ‘greenback’.
Attention today turns to the Eurozone’s latest industrial production figures, which may provide EUR with modest support if they show output accelerated in May.
US dollar (USD) tumbles after weaker CPI reading
The US dollar dropped sharply yesterday after softer-than-expected US consumer price index figures weakened expectations for further Federal Reserve interest rate hikes.
Headline inflation slowed from 4.2% in May to 3.5% in June, undershooting forecasts of 3.8%. At the same time, core inflation eased from 2.9% to 2.6%.
Looking ahead, another indication of cooling price pressures in today’s US producer price index could place the US dollar under additional pressure.
Canadian dollar (CAD) stable as oil prices remain elevated
The oil-sensitive Canadian dollar (CAD) delivered a mixed performance yesterday, strengthening against weaker rivals while losing ground elsewhere as crude prices stayed high but failed to extend their gains.
The focus for CAD today will be the Bank of Canada’s (BoC) latest interest rate announcement. Will a cautious message from policymakers cause the ‘loonie’ to weaken?
Australian dollar (AUD) lifted by stronger commodity prices
The Australian dollar (AUD) found support overnight as firmer commodity prices, alongside unexpectedly resilient market sentiment, helped underpin the currency.
New Zealand dollar (NZD) subdued as card spending falls
The New Zealand dollar (NZD) traded largely flat during the overnight session after an unexpected decline in domestic card spending limited the currency’s upside.
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