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UK Inflation and ‘Second Wave’ Coronavirus Fears in Focus

Pound News: UK Inflation Data Keeps Gloom on Sterling

This morning’s UK inflation results came in fairly close to forecasts – but were also the worst inflation figures since June 2016. Amid concerns that Britain’s economy would continue to be hit hard by the coronavirus pandemic, Sterling remains under pressure.

Tomorrow will see the Bank of England (BoE) hold its June policy decision. If the bank shows any signs that negative interest rates are possible, the Pound could be in for even deeper weakness.

Euro News: Resilient Eurozone Outlook Keeps Euro Resilient Versus Rivals

Today’s Eurozone data was fairly unsurprising, with inflation slowing as expected. However, the Euro remains appealing versus most major currencies. Market optimism around the EU’s handling of the coronavirus keeps the Euro buoyed.

The Euro has been driven more by rival strength and risk-sentiment than Eurozone news lately. That is likely to continue in the coming sessions as well, amid a lack of influential Eurozone news on the way.

US Dollar News: Mixed USD Sentiment despite Impressive US Data

Yesterday’s US retail sales results were highly impressive, and helped the US Dollar to rebound after weaker performance earlier in the week. However, demand for the US Dollar remains limited overall, due to continued caution from the Federal Reserve.

US jobless claims data due tomorrow will continue to indicate the impact of the coronavirus on the US economy. Overall though, the US Dollar’s appeal will likely remain limited even if safe haven demand returns, due to US economic jitters.

Canadian Dollar News: Boost to Canadian Fiscal Policy Keeps CAD Strong

Yesterday saw Canadian Prime Minister Justin Trudeau confirm that some of Canada’s financial assistance policies will be extended for a further two months. It boosted hopes that Canada’s economy would be more likely to weather the coronavirus pandemic, and CAD strengthened.

Risk-sentiment has been mixed though, and oil prices are volatile. These factors will likely keep pressure on the Canadian Dollar’s potential for gains in the coming days.

Australian Dollar News: ‘Aussie’ Rally May be Running Low on Steam

The Australian Dollar has defied dips in risk-sentiment to remain strong so far this week. However, while domestic coronavirus hopes continue to benefit the ‘Aussie’, the currency’s long period of strong performance is showing signs of wear.

The ‘Aussie’ could find a fresh boost tomorrow though, if Australia’s anticipated May job market report impresses.

 

Upcoming Data

Thursday, 18th June

02:30    Australian Job Market Report

12:00    Bank of England Policy Decision

13:30    Canadian Wholesale Sales

13:30    Canadian ADP Employment Change

 

James Spurway
Director of Sales and Dealing

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