Pound (GBP) weakened by fiscal jitters
The pound (GBP) trended lower against most of its peers yesterday, amid ongoing UK fiscal uncertainty.
Investor unease over the UK government’s upcoming budget continues to grow, amid concerns about how Chancellor Rachel Reeves will reconcile the government’s growth ambitions with its strained finances.
UK data remains in short supply at the end of this week, potentially leaving the pound directionless as we head into the weekend.
Euro (EUR) falters as German exports continue to fall
The euro (EUR) faced headwinds on Thursday as Germany’s latest trade data reported exports from the Eurozone’s most industrialised nation fell for a second consecutive month in August.
This offset potential gains from reports that a new French Prime Minister will be named by the end of the week, sidestepping the need for new elections in the Eurozone’s second-largest economy.
Unsurprisingly, EUR investors will be keeping a close eye on French political developments today. If the new PM is perceived as capable of restoring some credibility to the French government, the euro is likely to strengthen.
US dollar (USD) firms despite positive mood
The US dollar (USD) firmed on Thursday, with the currency recovering the bulk of the losses that followed the publication of the minutes from the Federal Reserve’s September policy meeting on Wednesday.
This rebound in USD demand came despite a broad uptick in risk appetite, amid the optimism surrounding the ‘first phase’ of the Gaza peace deal.
Closing out this week’s session is the publication of the University of Michigan’s latest US consumer sentiment index, with the US dollar likely to weaken if October’s index reports another deterioration of morale.
Canadian dollar (CAD) buoyed by BoC remarks
The Canadian dollar (CAD) ticked higher on Thursday, supported by comments from Bank of Canada (BoC) Senior Deputy Governor Carolyn Rogers, who called for more competition and fewer regulations in the banking sector to help boost Canada’s economy.
Canada’s latest jobs report will be in the spotlight today. Expect to see the ‘loonie’ falter if today’s data reveals the labour market continued to cool in September.
Australian dollar (AUD) firms on RBA Bullock comments
The Australian dollar (AUD) trended higher in overnight trade following comments from Reserve Bank of Australia (RBA) Governor Michele Bullock, who noted that services inflation remains sticky, even though inflation as a whole is moving in the right direction.
New Zealand dollar (NZD) subdued on weak PMI data
The New Zealand dollar (NZD) was left muted through Friday’s Asian trading session as the latest Business NZ PMI reported another contraction in the manufacturing sector last month.
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