Pound (GBP) mixed after BoE interest rate announcement
The pound (GBP) traded with mixed results yesterday, advancing against some weaker rivals while showing a more subdued performance elsewhere, as investors digested the Bank of England’s (BoE) latest interest rate decision.
Although three policymakers backed a rate increase, BoE Governor Andrew Bailey remarked that there was limited evidence to suggest inflationary pressures were becoming entrenched in the UK economy.
Sterling closes the week with a quiet UK economic calendar. Consequently, movement in the pound could remain fairly muted.
Euro (EUR) subdued even as GDP beats forecasts
The euro (EUR) lacked clear direction yesterday, with stronger-than-expected Eurozone GDP data doing little to lift the single currency.
Instead, EUR appeared to come under pressure from renewed geopolitical concerns after a Russian missile landed in Poland.
Focus now shifts to the Eurozone’s latest consumer price index. If July inflation is shown to have accelerated as expected, the euro could receive modest support.
US dollar (USD) weakens as slowing economy trims Fed expectations
The US dollar (USD) lost ground on Thursday as investors further scaled back expectations for additional Federal Reserve interest rate hikes this year.
Fresh US GDP data revealed that economic growth unexpectedly lost momentum during the second quarter, while June’s core PCE price index indicated that inflation continued to cool.
Looking ahead, the final reading of July’s US consumer sentiment index may drive movement in the ‘greenback’ today. Should it confirm a marked improvement in confidence, USD may recover some of yesterday’s losses.
Canadian dollar (CAD) pressured by weaker US dollar
The Canadian dollar (CAD) came under pressure yesterday, with the currency weakening in line with its positive correlation to the softer US dollar.
Canada’s latest GDP release will be the key focus for CAD investors today. If June’s figures show that economic growth strengthened, the ‘loonie’ could find some support.
Australian dollar (AUD) rises as producer inflation accelerates
The Australian dollar (AUD) strengthened overnight after Australian producer prices climbed sharply during the second quarter, reinforcing expectations that the Reserve Bank of Australia (RBA) could deliver further interest rate increases.
New Zealand dollar (NZD) holds steady on improving market mood
The New Zealand dollar (NZD) traded in a narrow range during Thursday’s Asian session, remaining close to multi-week highs against some counterparts as a cautiously positive market mood continued to support NZD.
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