Pound (GBP) uneven as Burnham takes office
The pound (GBP) traded without clear direction yesterday as Andy Burnham officially assumed office as the UK’s new Prime Minister.
While hopes that Burnham could deliver a period of greater political certainty offered some support to Sterling, his decision to appoint John Healey as Chancellor took many GBP investors off guard.
Attention shifts back to the UK’s economic outlook today, with the pound finding modest support after the latest UK employment figures exceeded market expectations.
Euro (EUR) pressured by weaker German PPI data
The euro (EUR) moved lower on Tuesday after Germany released its latest producer price index.
June’s figures revealed a 0.3% decline in factory gate prices, with easing price pressures prompting investors to scale back some of their more hawkish European Central Bank (ECB) policy expectations.
Looking ahead, Germany’s latest ZEW economic sentiment survey could provide the euro with a boost today if confidence in the Eurozone’s largest economy improves as forecast this month.
US dollar (USD) softens as ceasefire talks regain momentum
The US dollar (USD) began the week on the back foot as cautious optimism returned to the Middle East.
Although military exchanges between the US and Iran continued, sentiment improved after Tehran indicated it remained willing to pursue further negotiations.
Developments in the Gulf are likely to remain the key driver for the US dollar today, with demand for the safe-haven currency liable to weaken further if Washington signals a willingness to resume diplomatic talks.
Canadian dollar (CAD) pressured by softer inflation reading
The Canadian dollar (CAD) fell back on Tuesday after weaker-than-expected inflation data strengthened expectations that the Bank of Canada (BoC) will leave interest rates unchanged over the coming months.
Meanwhile, the ‘loonie’ faces fresh headwinds today after US President Donald Trump announced plans to introduce a 50% tariff on the majority of Canadian imports.
Australian dollar (AUD) advances despite Middle East tensions
The Australian dollar (AUD) remained well supported through Tuesday’s Asian session, with investors largely shrugging off the latest escalation in hostilities between the US and Iran.
New Zealand dollar (NZD) climbs on stronger inflation data
The New Zealand dollar (NZD) also gained ground overnight after a hotter-than-forecast second-quarter inflation reading boosted the currency.
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