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Pound Jumps as UK Inflation Beats Expectations

Pound News: GBP as UK Inflation Smashes Forecasts 

The Pound (GBP) rose today as the release of the UK’s consumer price index reported that domestic inflation rate soared to 2.5% in June. 

The sharper-than-expected jump in inflation was seen as placing more pressure on the Bank of England (BoE) to start considering the tapering of its bond purchases. 

With the outlook for the British economy continually improving, however, with the lifting of lockdown measures expected to boost the nation’s economic recovery, could we see the Pound exchange rate head higher through the second half of the week? 

Euro News: EUR Dips on Weak Eurozone Industrial Production 

The Euro (EUR) struggled today following the latest release of the Eurozone’s industrial production data for May. The figure fell below forecasts from April’s 0.6% to -1% and left some EUR investors concerned for the outlook for the Eurozone’s industrial sector. 

MarketWatch Analyst Maria Martinez, was more optimistic, however, saying that the Eurozone’s ‘industrial sector remains positive as an acceleration in Covid-19 vaccinations helps the region emerge from lingering restrictions and spurs in demand’. 

Analysts at Reuters said that year-on-year production had ‘massively increased’ as the Eurozone economy recovered from the ‘worst phrase of the Covid-19 pandemic in 2020’. 

EUR traders will also eye speeches from the European Central Bank’s (ECB) executive board today. If the ECB appears more optimistic about the outlook for the bloc’s economy, then we could see the single currency head higher against the major currencies.  

US Dollar News: USD Slips on Powell Comments 

The US Dollar has fallen back today in response to prepare comments by Federal Reserve Chair Jerome Powell, who is due to testify before Congress later this evening. 

Powell reiterated his stance that the recent surge in US inflation is ‘transitory’, dampening hopes that the Fed could start to tighten its monetary policy in the coming months. 

US Dollar investors will be awaiting the release of tomorrow’s jobless claims for fresh impetus, with USD exchange rates potentially firming if new claims continued to fall last week. 

Canadian Dollar News: Fluctuating Oil Prices Weigh on Commodity-Linked ‘Loonie’ 

The Canadian Dollar (CAD) has continued to fluctuated this week because of volatile oil prices. Fluctuating oil prices have affected the commodity-linked ‘Loonie’, seeing it waver against the major currencies such as the Euro and US Dollar. 

However, we could see CAD head higher later this week if oil prices show signs of edging higher on renewed demand.  

With the world’s largest economies – China and the United States – recovering from the Covid-19 pandemic, we could see demand for oil head higher along with the commodity-correlated Canadian Dollar. 

Additionally, a bullish monetary policy statement from the Bank of Canada (BoC) today could push-up the ‘Loonie’. 

Australian Dollar News: Improving Risk Sentiment Boosts ‘Aussie’ 

The Australian Dollar rose today thanks to an improvement in Australia’s Westpac consumer confidence gauge. Consumer morale rose despite a lockdown in Australia’s most populated city, Sydney. 

Improving risk sentiment could see the risk-sensitive ‘Aussie’ head higher later this week.  

Data Releases 

01:30 AUS Westpac Consumer Confidence (Jul) 

07:00 UK Consumer Price Index (Jun) 

10:00 EU Industrial Production (May) 

13:30 US Producer Price Index (Jun) 

15:00 CAN BoC Rate Statement 

17:00 US Fed’s Chair Powell testifies