Pound (GBP) directionless amid data vacuum
The pound (GBP) lacked a clear direction yesterday, with the absence of UK economic data leaving the currency struggling for momentum.
This saw Sterling trade in a wide range against its peers, with external factors driving some volatility.
The latest UK GDP figures have so far done little to support the pound today, despite revealing that the economy expanded by 0.4% in the second quarter. The World Cup in June contributed to the growth, while economists anticipate a slowdown across the second half of the year.
Euro (EUR) subdued as risk appetite improves
The euro (EUR) slipped against its more risk-sensitive counterparts yesterday as improving market sentiment reduced demand for the common currency.
Nevertheless, the euro avoided heavier losses due to its strong inverse relationship with the US dollar (USD), which weakened during the session.
Looking ahead, the euro could see limited movement today if Eurozone industrial production remained stagnant in June, as expected.
US dollar (USD) volatile following US inflation data
The US dollar initially weakened sharply yesterday after softer US inflation reduced expectations for further Federal Reserve interest rate hikes.
However, the ‘greenback’ subsequently recovered amid continued uncertainty surrounding the US-Iran conflict.
Looking to today, the latest producer price index could influence USD. An increase in producer prices during July could provide the currency with some support.
Canadian dollar (CAD) wavers as oil prices fluctuate
The commodity-linked Canadian dollar (CAD) struggled to establish a firm direction yesterday as crude oil prices continued to trade broadly sideways.
Oil market movements could once again influence the Canadian dollar today, with further volatility potentially resulting in choppy trading for CAD.
Australian dollar (AUD) slips as risk appetite fades
The Australian dollar (AUD) weakened overnight as a deterioration in market sentiment weighed on the risk-sensitive ‘Aussie’.
New Zealand dollar (NZD) tumbles to multi-week lows
The New Zealand dollar (NZD) fell sharply overnight after domestic business inflation expectations unexpectedly eased in the third quarter rather than increasing as forecast, reducing expectations of further interest rate hikes from the Reserve Bank of New Zealand (RBNZ).
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