Forex today: dollar failed by more data disappointments, sterling offered on BoE

Forex today in the early US shift saw a big offer in Sterling on the back of the BoE announcement while the dollar also struggled again on further data disappointments.

The pound fell out of bed today as US traders walked in with a BoE that appears more willing to put up with higher inflation for the sake of boosting growth ahead of uncertain times with Brexit. The pound dropped from the 1.3260's down to 1.3112 the low. The cross rallied through the 0.90 handle to score a high of 0.9048 from 0.8922 lows. 

EUR/USD recovered ground back to just below the 1.19 handle and short of yesterday's annual highs of 1.1909. The ISM non-manufacturing miss and a rise in continuing claims hurt the greenback that closed -0.07% in the DXY while US yields in the benchmark 10-years were down -2.19% having traded between 2.2159% - 2.2674% on the session.

The yen was strong again, testing the 110 handle with a score as low as 109.86 on the back of falling US yields and a less likely Fed hike in December. WTI fell back from the $50.00 level and hit as low as $48.85. Stocks were mixed with the Dow eking out another record high while other indices failed to impress. The commodities were back on the front foot with the Aussie up to 0.7967 from 0.7914 lows and the Kiwi moved to 0.7451 from 0.7391 lows. The CAD finished slightly lower than the dollar by -0.10%. Gold was bid and stayed consolidated after a move from $1,262 to $1,270, +0.12% on the session.

Key notes from US session

• Bank of England crushes Sterling - BBH
• US ISM disappoints on growth, but some signs of pipeline price pressures - ING
• US: ISM Non-Manufacturing plummets in July - Wells Fargo
• Atlanta Fed: GDPNow model forecast for real GDP growth in Q3 is 4%

Key events ahead

The RBA Monetary Policy Statement and retail sales for Australia.