Pound (GBP) subdued after UK inflation release
The pound (GBP) traded in a narrow range yesterday following the publication of the UK’s latest consumer price index.
Headline inflation slowed by more than forecast in June, falling from 2.8% to 2.6%. However, core inflation remained unchanged at 2.6%, defying expectations for a slight easing to 2.5%.
Looking ahead, fresh figures from the Confederation of British Industry (CBI) may affect GBP. Even so, attention is likely to stay on domestic political developments, with investors continuing to assess Andy Burnham’s first week as Prime Minister.
Euro (EUR) restrained ahead of ECB rate decision
The euro (EUR) edged higher yesterday as markets remained cautious, although the single currency struggled to build on its gains.
EUR traders were hesitant to make bold moves before the European Central Bank’s (ECB) upcoming interest rate announcement, which is due later today.
The ECB is widely expected to leave interest rates unchanged, shifting the spotlight onto the bank’s forward guidance. Any indication that additional rate hikes remain on the table could lend support to EUR.
US dollar (USD) lacks direction despite market caution
The US dollar (USD) traded without a clear trend yesterday, as a risk-off atmosphere failed to deliver a decisive boost for the safe-haven currency.
While USD strengthened against some weaker counterparts, it lost ground against currencies that were performing more strongly.
Attention today turns to the latest US initial jobless claims data. If claims increased last week, the ‘greenback’ may come under modest pressure.
Canadian dollar (CAD) supported by rising oil prices
The oil-sensitive Canadian dollar (CAD) edged higher yesterday as crude prices extended their gains amid the escalating crisis in the Middle East.
Expectations of slower Canadian retail sales growth in June could weigh on CAD today. However, the ‘loonie’ may remain supported if oil prices continue to trade at elevated levels.
Australian dollar (AUD) lifted by stronger employment figures
The Australian dollar (AUD) advanced overnight after employment data exceeded expectations, with 76,300 jobs added in June instead of the forecast 15,000.
New Zealand dollar (NZD) pressured by cautious sentiment
The New Zealand dollar (NZD) weakened overnight as the risk-sensitive ‘kiwi’ came under pressure from the prevailing cautious market mood.
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