Pound (GBP) directionless amid UK data drought
The pound (GBP) remained rangebound on Wednesday as the continued lack of UK economic data left Sterling without a clear catalyst.
GBP traders were also reluctant to make bold moves ahead of the Bank of England’s (BoE) interest rate announcement, which is scheduled for later today.
The BoE’s policy decision has the potential to trigger significant volatility in the pound. Should policymakers maintain their cautious approach to interest rates, Sterling may come under pressure.
Euro (EUR) muted with key data still to come
The euro (EUR) also lacked clear direction yesterday, with the absence of Eurozone economic releases providing little incentive for EUR movement.
The single currency remained subdued as markets looked ahead to several influential data releases due later this week.
Attention today turns to the Eurozone’s preliminary second-quarter GDP reading. If growth shows signs of improvement, it could lend the common currency some support.
US dollar (USD) weakens after Fed holds rates
The US dollar (USD) traded in a tight range through much of Wednesday’s session as investors stayed on the sidelines ahead of the Federal Reserve’s latest interest rate decision.
Following the announcement, USD fell as the Fed’s broadly neutral messaging and its 9-3 decision to leave interest rates unchanged prompted markets to scale back expectations for future rate rises.
Looking ahead, the latest estimate of second-quarter US GDP and June’s core PCE price index are both due for release today. Solid economic growth may help support USD, while softer inflation could weigh on the ‘greenback’.
Canadian dollar (CAD) strengthens as oil surges
The oil-linked Canadian dollar (CAD) advanced yesterday after crude prices climbed by around 7% in response to an Iranian ‘surprise attack’ in the Middle East and retaliatory pledges from US President Donald Trump.
With no notable Canadian economic data scheduled today, movements in oil prices are expected to remain the primary driver of CAD. Could renewed tensions in the Middle East push crude higher and provide further support for the ‘loonie’?
Australian dollar (AUD) pressured by cautious sentiment
The Australian dollar (AUD) traded quietly overnight as a cautious market backdrop reduced demand for the risk-sensitive ‘Aussie’.
New Zealand dollar (NZD) climbs on stronger business confidence
The New Zealand dollar (NZD) rallied during Thursday’s Asian session after New Zealand’s latest business confidence survey far exceeded expectations, rising to its highest level in five months.
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