The pound is trading lower this morning even as new inflation data showed UK consumer prices were up 0.5% in June, largely driven by spending on airfare on trips to continental Europe. But the harsh reality is inflation is still well below the Bank of England’s 2% target, which hasn’t been reached since December 2013. With this in mind, investors are bearish this morning on the pound with market futures pricing in an 82% chance of an interest rate cut at next month’s BoE meeting.

The euro is also lower after Euro-Zone and German sentiment surveys from ZEW revealed that institutional investors were much more pessimistic on the future of their respective economies than before the Brexit vote, which has spread uncertainty across Europe. Investors still expect the European Central Bank to talk of stimulus measures at this Thursday’s meeting, which continues to hold down the euro.

Across the pond, US housing start data for June beat analyst expectations, pushing the dollar up as the report continued to reflect a growing US economy after positive retail sales and employment reports were released earlier this month. The USD has gained almost a cent against its Canadian counterpart as oil prices pushed lower. Hopes turmoil in Turkey would help cut oversupply in oil are proving to be groundless and not support oil prices.

In the East, the yuan rebounded after five weeks of losses compared to the US dollar as investors began taking notice of China’s better than expected GDP growth in the past quarter. The yen continued its slide that started earlier this month with stimulus talks weighing on the currency and as investors are viewing the US dollar as more of a safe haven now.

EURUSD: The euro is down slightly as European and German institutional investors are more pessimistic about the economy.

GBPUSD: The pound is trading lower despite June’s inflation readings coming slightly ahead of analyst expectations.

AUDUSD: The Aussie dollar is tumbling as investor outlook on emerging markets cools.

USDCAD: The Canadian dollar is also trending down even as oil prices hold steady.