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Risk appetite returned as Canada dropped its tech tax to revive US trade talks, boosting sentiment. The USD weakened ahead of Thursday’s US jobs report, expected to show slowing job growth. Meanwhile, EUR traders eye CPI data for clues on future ECB moves.
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GBP
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GBP held steady as the UK offered little in terms of market-moving updates. Without significant domestic releases, the pound mirrored broader market sentiment, remaining sensitive to global risk trends and USD shifts.
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USD
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The USD made modest headway to kick off the week, despite an overall lackluster trading session. Inflationary pressure, as reflected in core PCE figures, was firmer than anticipated. However, weaker-than-forecast personal income and consumer spending metrics tempered the impact.
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EUR
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The EUR saw minimal directional push, largely due to a quiet economic calendar and a lack of fresh catalysts. Broader risk appetite and external data developments had more influence than any region-specific momentum.
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CAD
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The CAD posted mild gains, buoyed slightly by stable commodity prices, particularly crude oil. However, with no key domestic data, the CAD movement remained tethered to broader market flows and US economic indicators.
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The USD opened the week under pressure across major currency pairs. With American financial markets set for an early close due to the upcoming Independence Day holiday, June’s employment figures will be released on Thursday. Analysts anticipate a further cooling in job creation, with forecasts suggesting a drop from May’s 139,000 to just 113,000 new jobs. Unless the data vastly exceeds expectations, the USD’s downward trend is expected to continue, reflecting persistent bearish sentiment.
Investor sentiment has tilted firmly toward risk-taking this morning, following news that Canada will abandon its proposed digital services tax targeting major US tech firms like Alphabet and Meta. This strategic move aims to revive stalled trade negotiations with Washington, with both sides eyeing a resolution ahead of the July 21 deadline.
Later today, Germany will publish its latest inflation figures, with the broader Eurozone CPI data scheduled for tomorrow. Traders are currently pricing in just a single additional rate cut by the European Central Bank this year. However, any inflation surprise to the upside could challenge that view and provide a lift to the euro.
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HOW WE CAN HELP
Our experienced currency team is here to ensure you make the most of your international transfers. By gaining a clear understanding of your goals, we offer personalised support and recommend the most suitable strategies to help you navigate the currency market with confidence. Get in touch with Osman Hanif today on +44 (0) 20 3371 9200 or email osman@magnafinancial.com
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