Pound (GBP) steady despite higher UK borrowing costs
The pound (GBP) traded within a narrow range yesterday as renewed pressure emerged in the UK bond market.
The yield on 10-year gilts climbed to roughly 5.1% on Thursday, reaching its highest level in more than two months as investors questioned the government’s commitment to fiscal discipline after Andy Burnham unveiled a fresh package of tax relief for pubs.
Meanwhile, Sterling has opened today’s session on firmer footing following stronger-than-expected UK retail sales. However, these gains may prove short-lived if the UK’s latest services PMI falls short of expectations.
Euro (EUR) subdued after ECB keeps rates unchanged
The euro (EUR) lacked clear direction on Thursday after the European Central Bank (ECB) left interest rates unchanged at 2.25%, matching market expectations.
In her post-meeting remarks, ECB President Christine Lagarde warned that elevated energy prices are likely to keep Eurozone inflation above target until early 2027, but tempered these remarks by warning of mounting risks to growth.
Looking ahead, the euro could find fresh direction today if July’s flash PMIs indicate that private sector activity across the Eurozone picked up this month.
US dollar (USD) rallies as Red Sea tensions intensify
The US dollar (USD) advanced against most major currencies yesterday as a sharp rise in global energy prices boosted demand for the safe-haven currency after Houthi forces expanded the Middle East conflict into the Red Sea.
Further support for USD came from data showing US initial jobless claims dropped to their lowest level in almost six decades last week.
However, fresh tariff measures announced by US President Donald Trump appear to have taken some momentum out of the US dollar this morning, with renewed trade uncertainty weighing on sentiment.
Canadian dollar (CAD) lifted by rally in oil prices
The Canadian dollar (CAD) attracted solid support on Thursday as oil prices climbed to just below $100 a barrel, helping the commodity-linked currency overlook weaker domestic retail sales figures.
Looking ahead, the ‘loonie’ could build on these gains today if crude prices continue to move higher.
Australian dollar (AUD) supported by stronger PMI data
The Australian dollar (AUD) strengthened during Thursday night’s Asian session after the latest Australian PMI readings signalled a stronger-than-anticipated improvement in private sector growth this month.
New Zealand dollar (NZD) confined by cautious sentiment
The New Zealand dollar (NZD) traded in a tight range overnight as President Trump’s latest tariff announcement dampened market risk appetite.
Never miss a movement. Create a free account with TorFX to get the latest currency news delivered straight to your inbox. You can also set up rate alerts and check live rates 24/7.