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Sterling Exchange Rates Stable after GDP Data

Pound News: Stronger UK Growth Helps Sterling Rebound from Worst Levels

After a week of the Pound struggling in response to no-deal Brexit fears and rising Bank of England (BoE) interest rate cut bets, yesterday morning’s UK data finally offered the British currency a little support.

Sterling bounced back from its worst levels as Britain’s May growth rate figures came in slightly higher than expected, boosting hopes that Britain could avoid a recession this year. Still, the Pound’s appeal remained limited as UK production stats fell short of expectations and Brexit fears persisted.

No more notable UK data is due for publication for the remainder of the week. This leaves investors to react to comments from Bank of England (BoE) officials. Dovish comments would be GBP negative.

Euro News: Euro Finds Support from French Industrial Production Results

Despite most recent German data disappointing investors and leading to European Central Bank (ECB) interest rate cut bets, the Euro (EUR) was one of yesterday’s more resilient major currencies.

Weakness in its rival, the US Dollar, and some stronger than expected French industrial production data prevented the Euro from sliding in response to European Central Bank (ECB) speculation.

Today’s final German inflation figures were unchanged from initial forecasts and had no impact on the Euro, but dovish meeting minutes from the ECB’s last policy gathering could weaken EUR.

US Dollar News: Cautious Powell Sends USD Tumbling

The US Dollar broadly weakened overnight in reaction to some fresh comments from Federal Reserve Chairman Jerome Powell.

Powell strongly signalled that the Fed would cut US interest rates this month. His tone was more dovish than anticipated.

Speculation of as many as three US rate cuts over the next year could keep pressure on the US Dollar, but for now investors are looking ahead to this afternoon’s US inflation report.

Canadian Dollar News: CAD Dips after Bank of Canada Rate Decision

The Canadian Dollar softened yesterday following the Bank of Canada’s latest rate decision.

As expected, the BOC remained relatively optimistic about Canada’s economic outlook. However, the bank was quite cautious about the future direction of monetary policy and CAD exchange rates weakened.

Today’s Canadian new housing prices data will be the final notable Canadian dataset of the week, but global trade speculation could influence CAD movement as well.

Australian Dollar News: Australian Economic Concerns Keep Pressure on AUD

While the Pound to Australian Dollar exchange rate has been unable to hold yesterday’s weekly high, the Australian Dollar continues to be one of this week’s most poorly performing major currencies.

US-China trade fears and signs of weakness in Australia’s economic outlook are keeping the Australian Dollar on the back foot. Yesterday’s Australian consumer confidence data from Westpac came in much lower than expected.

Upcoming Data

Thursday, 11th July

02:00    Australian Consumer Inflation Expectations

02:30    Australian Home Loans

07:00    German Inflation Rate

07:45    French Inflation Rate

13:30    Canadian New Housing Price Index

13:30    US Inflation Rate

15:00    Fed Chairman Powell Testimony

Alastair Archbold
Currency Trader
T: 01442 892 062

 

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