Daily currency report

The US dollar strengthened against most of the majors while the UK inflation data has sent the pound lower against the dollar and the euro.

GBP

The pound strengthened against the dollar and the euro after BoE Governor's comments firmed investor expectations there will be further rate hikes in the coming months. However, the pound fell back again after UK inflation showed to have further slowed down with an annual rate of 2.5 per cent. Inflation is still firmly above the Bank's two per cent target and is unlikely to shake expectations that another rate hike is on the way.

USD

The dollar had a quiet day as there was no data on the US calendar. Trading in the US dollar could remain relatively quiet until today when we see the release of the Beige Book report and import and export prices along with the Treasury's foreign exchange report.

EUR

The euro rebounded from a near two-month low against the dollar after ECB President told the European Parliament's Economic and Monetary Affairs Committee that borrowing costs are low enough to support economic expansion. With interest rates still set to rise later this year, the ECB has continued to remain hawkish even on the back of a sharp drop in French and Italian industrial production.

JPY

Japanese wholesale prices grew 2.2 per cent in May, slightly above the forecast of a 2.1 per cent rise, and the Corporate Goods Price Index rose by 0.5 per cent matching the market consensus. This data did little to change the market's expectations and it is widely expected that the BoJ will raise interest rates again in August.