Pound (GBP) climbs as UK jobs data boosts rate hike bets
The pound (GBP) marched higher yesterday as stronger-than-forecast jobs data boosted Bank of England (BoE) interest rate hike speculation.
UK unemployment unexpectedly fell in the three months to August, fuelling bets that the BoE will raise rates in November and deliver three more hikes next year.
Turning to today, Sterling could attract fresh support after the UK’s latest inflation figures exceeded forecasts. However, worries about higher-than-forecast government borrowing may limit the pound’s potential.
Euro (EUR) slips following disappointing German data
The euro (EUR) fell yesterday after Germany’s latest ZEW economic sentiment index showed a larger-than-forecast deterioration in October.
EUR was also pressured by social unrest in multiple European countries and the ongoing French debt crisis, although the currency was cushioned by its negative correlation with the weakening US dollar (USD).
Ongoing political instability and concerns about a fiscal crisis in France may weigh on the common currency today. A speech from European Central Bank (ECB) President Christine Lagarde could also impact EUR.
US dollar (USD) softens amid US market and political jitters
The US dollar faced pressure yesterday as continued weakness in US equities and political jitters ahead of the midterm elections weighed on the currency.
In addition, ADP’s latest weekly employment change showed jobs growth slowing in the US, further undermining the ‘greenback’.
With US data in short supply today, wider market trends could continue to influence the US dollar, potentially denting USD if these concerns persist.
Canadian dollar (CAD) firms as oil hits multi-month highs
The commodity-linked Canadian dollar (CAD) rose yesterday as Brent crude hit fresh multi-month highs, although it trimmed its gains in the evening as oil prices pulled back from their peaks.
Oil price movements may continue driving the Canadian dollar today amid a lack of domestic data. CAD could rise if crude prices remain elevated.
Australian dollar (AUD) firms on hawkish RBA remarks
The Australian dollar (AUD) strengthened overnight as Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser warned that higher interest rates may be needed to anchor inflation expectations.
New Zealand dollar (NZD) flat amid mixed trade
The New Zealand dollar (NZD) traded sideways during Wednesday’s Asian trading session amid a lack of New Zealand data and a mixed market mood.
Never miss a movement. Create a free account with Currencies Direct to get the latest currency news delivered straight to your inbox. You can also set up rate alerts and check live rates 24/7.
