Pound (GBP) ticks higher following UK CPI
The pound (GBP) attracted support yesterday as a sharper-than-forecast rise in UK inflation reinforced bets that the Bank of England (BoE) will tighten monetary policy.
However, Sterling's gains were somewhat limited by concerns about rising government debt, after new data showed higher-than-expected government borrowing in September, ahead of next week’s Autumn Budget.
Two data releases from the Confederation of British Industry (CBI) could undermine GBP today, if they print as expected. However, Sterling may attract support if BoE Governor Andrew Bailey strikes a hawkish tone when he delivers a speech later in the session.
Euro (EUR) slips as French bond yields hit 24-year high
The euro (EUR) remained on the defensive yesterday amid ongoing social unrest across Europe and worries about French government debt.
France’s 10-year bond yield briefly rose to 5% for the first time since 2022, fuelling fears about a fiscal crisis in the Eurozone’s second-largest economy.
Looking forward, an expected deterioration in Eurozone consumer confidence in October could apply fresh pressure to the euro today.
US dollar (USD) pressured by improving mood
The US dollar (USD) was subdued yesterday, with the safe-haven currency softening against its stronger rivals amid an improving market mood.
However, overall movement was muted as the uptick in risk sentiment was limited in scope.
The latest US initial jobless claims figure could influence the ‘greenback’ today, although its impact may be modest. Elsewhere, market risk appetite could be a key factor for the safe-haven US dollar.
Canadian dollar (CAD) undermined by softer oil prices
The commodity-linked Canadian dollar (CAD) wavered yesterday, with CAD slipping against some peers as oil prices edged lower.
Crude prices could remain the primary driver of the Canadian dollar today, with a spike in prices likely to carry the ‘loonie’ higher.
Australian dollar (AUD) slips as risk appetite fades
The Australian dollar (AUD) retreated overnight as a souring market mood dampened demand for the risk-sensitive currency.
New Zealand dollar (NZD) falters as inflation cools
The New Zealand dollar (NZD) faced turbulence overnight, ultimately weakening after New Zealand inflation cooled more than forecast in the third quarter, dampening bets on a Reserve Bank of New Zealand (RBNZ) interest rate hike next week.
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