US Dollar (USD) Extends Gains

Pound (GBP) Wavers Amid Market Uncertainty

The pound (GBP) was directionless yesterday, in the absence of any notable UK economic data to help steer the currency.
This led to a mixed performance for Sterling, with the currency rising against several of its weaker peers while simultaneously striking a new two-month low against the US dollar (USD).

In the continued lull in UK economic data, the pound may struggle to find momentum today.

Euro (EUR) Slides as Eurozone Economy Slows to a Crawl
The euro (EUR) weakened through Wednesday’s trading session, after the Eurozone’s latest GDP figures reported growth in the bloc slowed to just 0.1% in the second quarter.
While the GDP print beat forecasts that the Eurozone economy would flatline in Q2, it was seen as pressuring the European Central Bank (ECB) to do more to help support growth.

Coming up, the release of Germany’s consumer price index may act as another headwind for the euro today, as economists predict inflation in the Eurozone’s largest economy will have fallen below the ECB’s 2% target in July.

US Dollar (USD) Extends Gains on Hawkish Fed Rate Decision
The US dollar accelerated again through yesterday’s session, with an initial uptick in USD being supported by a stronger-than-expected rebound in US GDP.

These gains then accelerated in the wake of the Federal Reserve’s latest interest rate decision, as the bank left rates on hold and Fed Chair Jerome Powell’s accompanying comments struck a hawkish tone.

The Fed’s preferred indicator for inflation, the core PCE price index, will be the focus for USD investors today. June’s data may extend the US dollar’s bullish run if June’s figures are supportive of the Fed’s hawkish bias.

Canadian Dollar (CAD) Firms as BoC Leaves Rates on Hold
The Canadian dollar (CAD) trended broadly higher on Wednesday, supported by the Bank of Canada’s (BoC) decision to leave interest rates on hold.

Canada will publish its latest GDP figures later today. If growth contracted again as forecast in June, the ‘loonie’ will likely falter.

Australian Dollar (AUD) Rebounds on Impressive Retail Data
The Australian dollar (AUD) strengthened overnight on Wednesday, with the currency clawing back some of its recent losses in response to stronger-than-expected domestic retail sales figures.

New Zealand Dollar (NZD) Buoyed by Positive Risk Flows
The New Zealand dollar (NZD) also rallied in overnight trade amid a modest improvement in market risk appetite.