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Trade-Correlated Currencies Sold from Highs as US Markets Close for 4th of July

Pound News: Sterling Remains Under Pressure

A lack of notable developments in UK politics or economics yesterday left the Pound little changed. Investors continued to find the British currency broadly unappealing as fears of a no-deal Brexit persisted.

Markets remain anxious that Britain’s next Prime Minister could lead the nation towards a no-deal Brexit, and this week’s UK data showed that Brexit fears were having a significant downside impact on economic activity.

Some UK house price data and labour productivity stats will be published today, but they’re unlikely to be hugely influential as investors await more notable political developments.

Euro News: Eurozone Retail Sales Miss Mark and Lead to Bets of ECB Interest Rate Cut

Could the European Central Bank (ECB) still cut Eurozone interest rates as soon as this month? Some analysts think so, and more Eurozone data like yesterday’s retail sales stats could cause bets of a July rate cut to rise further.

Eurozone retail sales were forecast to have shown growth of 0.2% in May, but actually came in at 0.1%. The data left investors betting that the ECB was more likely to introduce monetary policy easing in the foreseeable future.

Reaction to German factory orders and French trade balance data could influence the Euro’s movement today, but investors will also be keeping a close eye on potential ECB developments.

US Dollar News: USD Limp Ahead of US Non-Farm Payrolls Report

The US Dollar was static yesterday as US markets closed to observe the 4th of July bank holiday.

Today’s US Non-Farm Payroll report from June could lend the US Dollar support before the weekend however if it shows sturdy job growth and average earnings.

Canadian Dollar News: CAD Resilient on Strong Domestic Data and Trade Hopes

While the Canadian Dollar recoiled slightly from its best levels amid profit-taking yesterday, the Pound to Canadian Dollar exchange rate still trended close to its worst levels since 2017.

A brief slip in oil prices weighed on the ‘Loonie’, but recent strong Canadian data and Bank of Canada (BoC) interest rate hike bets are keeping CAD largely buoyed.

However, if today’s Canadian job market report is particularly disappointing it could lead to late-week CAD losses.

Australian Dollar News: Speculation of Further RBA Rate Cuts Slow AUD Rally

The Australian Dollar jumped in the first half of the week, but the currency recoiled from its best levels yesterday as the latest Australian retail sales results disappointed investors.

Disappointing Australian data led to fresh speculation that the Reserve Bank of Australia (RBA) could still cut interest rates again despite recently signalling a pause in additional easing.

Upcoming Data

Friday, 5th July

07:00    German Factory Orders

07:45    French Trade Balance

09:30    UK Labour Productivity

13:30    Canadian Job Market Report

13:30    US Non-Farm Payrolls

15:00    Canadian Ivey PMI

Alastair Archbold
Currency Trader
T: 01442 892 062

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