Euro Could Be Boosted In Coming Days (EUR/USD), UK Economic Data To Be Released This Week (EUR/GBP), CAD Fell In The Wake Of The PBoC’s Announcement (GBP/CAD)
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Summary:
- EUR/USD recently hit 6-week highs.
- CAD proves its sensitivity to risk appetite.
- Could UK inflation hit double figures?
EUR/USD recently reached 6 week highs.
The market is reflecting bearish signals for this currency pair. A stagnant U.S. Dollar and more accommodating Chinese monetary policy may continue to boost the single euro currency in the days ahead. The Euro to Dollar exchange rate recently hit six-week highs. However, its recovery was halted by resistance on the charts. Last week, when a slew of data from the Bureau of Labor Statistics suggested that a significant slowing of U.S. inflation pressures may have started to move through the pipeline last month, the euro rose to its highest level since the first days of July. Furthermore, The unexpected decision to cut interest rates, announced by the People's Bank of China (PBoC), on Monday could help the euro this week if the PBoC permits the managed-floating Renminbi to weaken in order to boost the regional economy.
EUR/USD Price Chart
UK major economic data to be released this week
The market is reflecting bullish signals for this currency pair. The market is unconvinced that the current trading week will aid the pound sterling in recovering against major currencies with major economic data such as the latest jobs, wages, inflation and retail sales all set to be released. Although the labor market is currently strong, there is a good likelihood that headline UK inflation will reach double digits this week. The Bank of England has already issued a warning that this year's inflation could reach 13% while the economy experiences a five-quarter slump. The UK is experiencing drought-inducing heatwaves, sky-high energy prices, and a political void in No. 10, so any more bad economic news will enrage the already irate populace.
EUR/GBP Price Chart
CAD fell in the wake of PBoC announcement to cut interest rates.
The Pound sterling to the Canadian Dollar rallied from August lows, but could climb further if the Loonie is able to build on Monday declines, which is a busy period for both the U.S and Canada regarding economic data. After the People's Bank of China (PBoC) unexpectedly lowered interest rates in reaction to alarming local economic statistics, the Canadian Dollar fell on Monday along with other currencies that are highly sensitive to risk appetite, commodity prices, and changes in the outlook for global growth. But in light of the aforementioned, it's possible, if not likely, that the directional risk for GBP/CAD is now tilting a little more to the upside than it is to the downside. The Loonie and Sterling must now each navigate a series of domestic economic event risks that are lurking along the path ahead.
GBP/CAD Price Chart
