ForexLive European FX news wrap: UK CPI comes in hot | Forexlive

It was another slow session for major currencies as the summer lull continues to strike. There was no post-CPI follow through in the dollar moves yesterday, with EUR/USD continuing to keep above 1.1600 for now. The pair is caught in just a 26 pips range today, showcasing the lack of action in FX on the day.

USD/JPY is also little changed, keeping at 148.70 levels and even on a hotter UK CPI report, the pound isn’t doing much with GBP/USD just hovering under 1.3400.

The UK inflation numbers for June came in at a beat, with food price inflation rising for a third month in a row. That now adds to a bit of a concern for the BOE, who have until now placed much more emphasis on services inflation.

Still, with the UK labour market report coming up tomorrow, policymakers could do with a softer data on jobs to argue for a rate cut in August. However, make no mistake that stagflation worries are building.

Going back to FX, the commodity currencies were pretty much little changed and held in narrow ranges as well amid a lack of urgency during the session.

In the equities space, European stocks opened lower but recovered some poise as US futures also pared early losses to be little changed now. The US PPI data will be up next today before we get to retail sales and the weekly jobless claims tomorrow to add to the mix. After the sluggish showing in Wall Street yesterday, it will be interesting to see how things fare with earnings season also in focus.

Elsewhere, gold is up slightly but that doesn’t take away from the drop in the past two days while Bitcoin is consolidating at the highs and not really pushing for the next upside leg just yet on the week.