Pound Hits Four-Month High against the Euro following BoE Decision – TorFX News

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Pound (GBP) Firms following BoE Decision 

The Pound (GBP) strengthened against most of its rivals yesterday, as the Bank of England (BoE) struck a fairly hawkish tone following its interest rate decision

The BoE kept its interest rate unchanged but increased its inflation forecast to 4% by the end of this year, adding that ‘some modest tightening of monetary policy’ may be necessary to control inflationary pressures in the medium term. 

With no major market-moving data due out of the UK today, domestic business and Covid news could influence GBP exchange rates. 

Euro (EUR) Muted despite Strong German Data 

The Euro (EUR) traded mostly sideways yesterday, posting marginal losses overall, despite Germany’s factory order growth printing in at over double the predicted figure. 

EUR investors seemed unimpressed, leaving the Euro at the mercy of movements in its paired currencies. 

Turning to today, the Euro is facing headwinds this morning as Germany’s industrial production figures unexpectedly contracted. This could continue weighing on the single currency as the day goes on. 

US Dollar (USD) Softens amid Unsurprising Data 

The US Dollar (USD) softened through yesterday’s session, as unsurprising US data did little to support the ‘Greenback’. 

Initial jobless claims fell last week, though marginally above the forecast figure. However, this drop in unemployment did little to boost USD as joblessness remains well above pre-pandemic levels. 

The US non-farm payrolls data is the focus for USD investors today, with 870,000 new jobs expected to have been added to the American economy in July. However, after the ADP employment figures missed forecasts, could USD face more disappointment? 

Canadian Dollar (CAD) Gains on Record Exports 

The Canadian Dollar (CAD) climbed yesterday amid a modest recovery in oil prices and a better-than-expected balance of trade. 

Canada posted a trade surplus of CA$3.23bn in June rather than the CA$0.68bn deficit that was forecast, with the figure boosted by an 8.7% rise in exports, which reached a record high of CA$53.8bn. 

Employment data from Canada could further boost CAD today, with the figures expected to be broadly positive. 

Australian Dollar (AUD) Dips on Poor PMI 

The Australian Dollar (AUD) slipped in overnight trade, as Australia’s services PMI unexpectedly dropped to 51.7, rather than rising to 58 as expected. 

New Zealand Dollar (NZD) Flat on Lack of Data 

The New Zealand Dollar (NZD) traded mostly sideways overnight, amid a stable risk appetite and a lack of data from New Zealand.