Pound (GBP) wavers on mixed UK PMIs
The pound (GBP) was subdued through yesterday’s session, following the release of a mixed UK services PMI.
While growth in the UK’s vital services sector proved more modest than expected, the index highlighted underlying strength in the sector, which helped to limit Sterling selling pressure.
Turning to today’s session, the pound faces pressure this morning, following dovish comments from Bank of England (BoE) Governor Andrew Bailey.
Euro (EUR) slumps on dire Eurozone PMIs
The euro (EUR) tumbled on Monday, in response to the Eurozone’s weaker-than-expected PMIs.
August’s preliminary figures reported the bloc’s private sector contracted for the first time since January, with a particularly worrying decline in Germany’s manufacturing sector stoking fears the Eurozone’s largest economy is currently in a recession.
Coming up, Germany will publish its latest IFO business climate index later this morning. Expect to see the euro extend its losses if it reports morale continued to deteriorate this month.
US dollar (USD) recovery undermined by Fed rate cut bets
The US dollar (USD) got off to an uneven start this week. USD exchange rates initially ticked higher on Monday as worrying Eurozone PMIs spooked markets.
However, the ‘greenback’ subsequently relinquished these gains through the US trading session amid growing bets for another 50bps interest rate cut from the Federal Reserve.
Meanwhile, the release of the latest US consumer sentiment survey could drag on the US dollar this afternoon as household sentiment is forecast to have deteriorated this month.
Canadian dollar (CAD) buoyed by rising oil prices
The Canadian dollar (CAD) traded with modest gains on Monday, as the appeal of the commodity-linked currency was buoyed by an appreciation of oil prices.
Looking ahead, Bank of Canada (BoC) Governor Tiff Macklem will deliver a speech later this evening. Expect to see the ‘loonie’ weaken if Macklem hints that the bank will continue to cut interest rates.
Australian dollar (AUD) rocked by RBA rate decision
The Australian dollar (AUD) traded in a wide range in overnight trade following the Reserve Bank of Australia’s (RBA) latest interest rate decision.
After initially rising on the back of the RBA’s decision to leave rates on hold, the ‘Aussie’ subsequently pared these gains after RBA Governor Michele Bullock’s accompanying speech, in which she stated that a rate hike was not discussed at the meeting.
New Zealand dollar (NZD) buoyed by risk-on flows
The New Zealand dollar (NZD) rallied overnight as a broadly positive market mood helped to underpin the risk-sensitive currency.
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