Daily currency reprt
Overview
The sterling dropped back from its high against the dollar after the BoE's quarterly inflation report shoed the CPI rate to be less than expected. Consequently, the pound was sold-off as financial markets had priced in a more aggressive monetary tightening campaign.
GBP
Before the inflation report, the pound was briefly dented by UK June trade figures. After eight straight days of strong gains, it may be running out of steam. The concern is that the recent rise in the British pound will hurt the export sector, which could filter into a larger trade deficit.
USD
With the Fed having apparently ended its policy of monetary tightening, investors are now focusing on other data in order to gauge the true state of the US economy.
EUR
The euro continues to benefit from the divergent monetary policies of the eurozone and the US. It moved within reach of a two-month peak versus the dollar and carved out new record highs versus the yen.
JPY
The yen is weaker against all of the major currencies going into Bank of Japan's monetary policy meeting.