Spectrum FX Daily Report

GBP: The British Pound was rangebound yesterday owing to a lack of impactful domestic data releases. In fact, this may have prompted investors to keep a focus on the upcoming UK elections. For now, the Bank of England is on a blackout period ahead of the elections on July 4th. This could mean that the lack of forward guidance in any capacity may keep Sterling muted in the coming days.

EUR: The Euro continues to lose ground due to rising political risk premia amid concerns about the outcome of the French elections on Sunday June 30th. As far as macroeconomic data is concerned, the headline German IFO Business Climate Index fell to 88.6 in June from 89.3 in May. Looking forward, investors await preliminary inflation data for June in several major European economies, including France, Spain, and Italy, published on Friday.

USD: The U.S. Dollar firmed slightly in Asian trade and remained close to two-month highs as anticipation of key U.S. inflation data saw investors largely favour the greenback. In fact, the recent hawkish comments by influential FOMC members suggested that the US central bank has no intention to start lowering borrowing costs anytime soon. That said, signs of moderating inflationary pressures keep hopes alive for a September Fed rate cut move and cap the USD.

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