Pound (GBP) sidelined by budget concerns
The pound (GBP) was left mostly rangebound on Thursday as a continued lull in UK economic indicators left the currency vulnerable to autumn budget speculation.
GBP investors remain concerned that a sizeable gap in public finances will force Chancellor Rachel Reeves to enact significant tax hikes or spending cuts if she is to stick to the government’s fiscal rules.
Turning to today, the pound is under pressure as the UK’s latest GDP figures reported month-on-month growth stalled in July.
Euro (EUR) firms as ECB leaves policy untouched
The euro (EUR) strengthened yesterday in the wake of the European Central Bank’s (ECB) latest interest rate decision.
In addition to leaving interest rates on hold as widely expected, the ECB also upgraded its 2025 growth forecast, while ECB President Christine Lagarde suggested that risks to the Eurozone economy are ‘more balanced’.
Looking ahead, a lull in notable Eurozone data may see movement in the euro driven by wider market trends today.
US dollar (USD) rangebound despite rising inflation
The US dollar (USD) traded in a narrow range on Thursday, as USD investors appeared unfazed by the latest US inflation figures.
While US inflation accelerated to a seven-month high in August, USD investors continued to price in multiple interest rate cuts through the remainder of 2025.
Closing out this week’s session will be the publication of the latest US consumer sentiment index. A modest deterioration in morale this month could trigger some fresh USD selling pressure.
Canadian dollar (CAD) undermined by soft oil prices
The Canadian dollar (CAD) trended broadly lower yesterday as falling oil prices weakened the appeal of the commodity-linked currency.
CAD data remains in short supply today, likely leaving movement in the ‘loonie’ to stay tied to oil price dynamics.
Australian dollar (AUD) dented by cautious mood
The Australian dollar (AUD) initially firmed overnight but was forced to relinquish these gains by the end of Friday’s Asian trading session as market risk appetite began to sour.
New Zealand dollar (NZD) undermined by factory sector contraction
The New Zealand dollar (NZD) also came under pressure in overnight trade after New Zealand’s latest manufacturing PMI reported a shock contraction in the factory sector last month.
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