Pound (GBP) flat ahead of key data
The pound (GBP) treaded water yesterday, as GBP investors remained cautious ahead of several high-impact UK economic releases due later this week.
Markets are preparing for increased volatility over the coming days, with these figures likely to influence expectations over whether the Bank of England (BoE) could tighten monetary policy before year-end.
The run of UK data begins with June’s employment figures, with Sterling coming under pressure this morning after unemployment printed above expectations in June.
Euro (EUR) buoyed by USD weakness
The euro (EUR) benefited from its strong inverse relationship with the US dollar (USD) on Monday.
However, this failed to generate any meaningful upside for the single currency amid persistent concerns surrounding the impact of elevated gas prices on the Eurozone economy.
Germany will release its latest ZEW economic sentiment index today, with the euro potentially finding support if morale in the bloc’s largest economy improved this month.
US dollar (USD) pressured by dovish Fed bets
The US dollar began the week on the back foot, falling to fresh multi-month lows against several of its peers as markets continued to scale back Federal Reserve rate hike expectations.
However, the ‘greenback’ recovered most of its early losses late on Monday as a deterioration in market risk appetite fuelled demand for safe-haven assets.
The US dollar could come under renewed pressure today if the latest ADP figures show that US employment growth continued to slow during the final week of July.
Canadian dollar (CAD) subdued despite rising inflation
The Canadian dollar (CAD) remained subdued on Monday, as a stronger-than-expected increase in domestic inflation failed to generate fresh expectations for a Bank of Canada (BoC) rate hike later this year.
Looking ahead, oil prices are likely to dictate movement in the ‘loonie’ today, with CAD potentially finding support after Brent crude climbed back above $90 a barrel.
Australian dollar (AUD) wobbles as sentiment deteriorates
The Australian dollar (AUD) fluctuated through overnight trade, initially gaining after consumer confidence unexpectedly improved before subsequently coming under pressure as market sentiment deteriorated.
New Zealand dollar (NZD) slides as investors book profits
The New Zealand dollar (NZD) fell sharply overnight as weaker risk appetite encouraged investors to take profits on the ‘kiwi’.
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