Pound (GBP) muted as data remains sparse
The pound (GBP) edged lower yesterday as a lack of UK economic data offered little direction for the currency.
Moves in the UK bond market added to the uncertainty, with gilt yields climbing above 5% before easing back during the afternoon as oil prices fell.
With the UK economic calendar again lacking data today, Sterling could remain subdued, particularly ahead of tomorrow’s release of the UK’s GDP figures.
Euro (EUR) directionless amid quiet session
The euro (EUR) traded without a clear direction yesterday as a limited flow of Eurozone economic data provided little impetus for the single currency.
External factors also offered little guidance for EUR, with the US dollar (USD) confined to a narrow range and risk appetite remaining mixed.
Looking ahead to today, Germany’s final inflation reading for July could influence EUR. As the figures confirmed a rise in inflation, the single currency may find some support as the session progresses.
US dollar (USD) unsettled as risk appetite shifts
The US dollar experienced choppy trading yesterday as a lack of US economic data left the currency largely driven by changes in market risk appetite.
Against this backdrop, the safe-haven ‘greenback’ fluctuated as sentiment shifted throughout the session.
Attention today will turn to the latest US consumer price index. A cooling in inflation last month could weigh on the US dollar.
Canadian dollar (CAD) gives up gains as oil prices fluctuate
The crude-sensitive Canadian dollar (CAD) initially strengthened yesterday after oil prices briefly climbed above $90 per barrel. However, CAD surrendered its gains as crude prices weakened later in the evening.
Looking ahead, movements in crude prices could remain a key influence on the ‘loonie’. Continued volatility in oil markets could therefore create further fluctuations in CAD exchange rates.
Australian dollar (AUD) pressured by cautious sentiment
The Australian dollar (AUD) slipped slightly overnight as concerns grew that peace negotiations between the US and Iran had stalled.
New Zealand dollar (NZD) slips as risk aversion weighs
The New Zealand dollar (NZD) suffered sharper losses last night as a cautious market mood reduced demand for the risk-sensitive ‘kiwi’.
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