Pound (GBP) undermined by pre-budget jitters
The pound (GBP) was subdued yesterday as pre-budget nerves left GBP investors wary of the currency.
These jitters were underpinned by remarks from former Bank of England (BoE) Chief Economist Andy Haldane, who suggested that the uncertainty posed by the budget is ‘the single biggest reason why growth has flatlined’ in the second half of 2025.
The Confederation of British Industry’s (CBI) latest distributive trades index may provide a small distraction from the budget today, with another decline in UK retail sales volumes potentially exerting more pressure on Sterling.
Euro (EUR) buoyed by Ukraine peace hopes
The euro (EUR) ticked higher on Monday, supported by fresh hopes of a breakthrough in the Ukraine-Russia peace process.
This allowed the single currency to largely shrug off this month’s surprise deterioration in German business sentiment.
Looking ahead, confirmation that Germany’s economy stalled in the third quarter after contracting in Q2 could act as a headwind for the euro today.
US dollar (USD) pressured by renewed Fed rate bets
The US dollar (USD) stumbled at the start of this week amid a dovish repricing of Federal Reserve interest rate expectations that catapulted the odds of a December cut to 75%.
Adding to the pressure on the ‘greenback’ was the optimism surrounding a potential Ukraine-Russia peace deal.
Coming up, the latest US retail sales figures may soften USD demand even further if they report a slowdown in sales growth in September.
Canadian dollar (CAD) subdued amid soft oil prices
The commodity-linked Canadian dollar (CAD) edged lower on Monday, pressured by a further softening of oil prices amid hopes of an end to the war in Ukraine.
Assuming oil prices remain in decline, the ‘loonie’ may stay on the back foot through today’s session.
Australian dollar (AUD) muted amid regional tensions
The Australian dollar (AUD) was subdued in overnight trade on Monday amid ongoing tensions between China and Japan.
New Zealand dollar (NZD) dips ahead of expected RBNZ rate cut
The New Zealand dollar (NZD) drifted lower in overnight trade, as NZD investors erred on the side of caution ahead of the Reserve Bank of New Zealand’s (RBNZ) interest rate decision on Wednesday.
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