Pound (GBP) subdued as CPI fails to boost BoE rate bets
The pound (GBP) remained on the defensive against most of its peers yesterday, following the publication of the UK’s latest consumer price index.
Although July’s CPI figures showed UK inflation climbed to a four-month high, this failed to alter expectations that the Bank of England (BoE) will keep interest rates unchanged for the rest of 2026.
Meanwhile, a temporary lull in UK data could leave Sterling lacking direction today.
Euro (EUR) supported by USD weakness
The euro (EUR) moved broadly higher on Wednesday, benefiting from its strong inverse relationship with the US dollar (USD).
However, gains in EUR were ultimately capped following remarks from European Central Bank (ECB) President Christine Lagarde, who highlighted the potential dangers of the EU falling behind in the AI revolution.
Looking ahead, the euro could extend its advance today if minutes from the ECB’s latest policy meeting suggest policymakers are preparing to raise interest rates in the coming months.
US dollar (USD) tumbles on Treasury buyback plans
The US dollar came under intense selling pressure on Wednesday after the US Treasury announced plans to double its purchases of longer-dated government debt.
The subsequent publication of minutes from the Federal Reserve’s July meeting then did little to halt the decline, despite the broadly hawkish tone of the report.
Coming up, the US dollar could remain under pressure today if the latest data reveals another increase in US initial jobless claims.
Canadian dollar (CAD) weakened by tariff concerns
The Canadian dollar (CAD) slipped against most of its peers on Wednesday as only modestly higher oil prices provided limited support amid lingering US trade concerns.
Looking ahead, the ‘loonie’ could face additional pressure today as Canada’s latest PPI figures are expected to show that domestic inflation continued to ease last month.
Australian dollar (AUD) pressured by weak jobs data
The Australian dollar (AUD) edged lower through Thursday’s Asian session after disappointing employment figures revealed a surprise contraction in domestic job growth last month.
New Zealand dollar (NZD) supported by stronger risk appetite
The New Zealand dollar (NZD) extended its recent gains in overnight trade as improving risk appetite continued to support the currency.
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