Pound (GBP) subdued amid a lack of fresh catalysts
The pound (GBP) struggled to find direction yesterday as the absence of significant UK economic releases left Sterling without a clear driver.
Limited movement across UK bond markets also did little to encourage movement in the currency.
With another quiet domestic calendar today, the pound may instead take its cues from broader market trends and movements among its major peers.
Euro (EUR) steady as ECB minutes reinforce rate hike expectations
The euro (EUR) remained largely unchanged on Thursday after the latest minutes from the European Central Bank’s (ECB) July meeting offered little that was unexpected.
Policymakers continued to highlight concerns over elevated inflation, while suggesting that another interest rate increase could be necessary to ensure price pressures return sustainably towards target.
Looking ahead, the euro could find some support today if the latest data shows that economic confidence across the Eurozone improved again in August.
US dollar (USD) muted ahead of Warsh address
The US dollar (USD) traded within a tight range yesterday as investors adopted a cautious stance ahead of Federal Reserve Chair Kevin Warsh’s speech at the central bank’s annual Jackson Hole symposium.
Market participants will be watching Warsh’s comments closely for any indication of how policymakers intend to respond to persistent inflation alongside signs of softer economic momentum.
A hawkish tone could provide a lift for the US dollar later today. However, unless Warsh succeeds in reviving expectations of a September rate hike, gains for the ‘greenback’ could remain limited.
Canadian dollar (CAD) subdued as trade tensions persist
The Canadian dollar (CAD) lacked momentum on Thursday, with lingering concerns over global trade tensions and weaker oil prices weighing on demand for the commodity-linked currency.
The ‘loonie’ could find firmer footing during today’s session, however, with Canada’s latest GDP figures expected to show a strong rebound in economic growth during the second quarter following a sluggish start to the year.
Australian dollar (AUD) builds on RBA-fuelled gains
The Australian dollar (AUD) continued to advance through Friday’s Asian session, with firmer commodity prices and expectations of a more hawkish Reserve Bank of Australia (RBA) providing support.
New Zealand dollar (NZD) supported by brighter market mood
The New Zealand dollar (NZD) also extended its gains overnight as improving risk appetite and a reduction in domestic political uncertainty helped bolster demand for the ‘kiwi’.
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