Pound (GBP) dragged down by Labour leadership rumours
The pound (GBP) came under fresh pressure yesterday amid speculation that Prime Minister Keir Starmer could face a leadership challenge following the autumn budget.
The rumours had echoes of the political instability that plagued the pound during the final years of the previous government, thereby unnerving GBP investors.
Turning to today, the UK’s preliminary GDP figures revealed that growth slowed more than expected in the third quarter, from 0.3% to 0.1%. This is weighing on the pound today, as it’s fuelling bets on another Bank of England (BoE) interest rate cut in December.
Euro (EUR) quiet amid risk-positive trade
The euro (EUR) was subdued yesterday as a modest recovery in the US dollar (USD) and a risk-on market mood weighed on EUR exchange rates.
A lack of impactful Eurozone economic data meant the euro was left to trade on these wider market trends.
The European Central Bank’s (ECB) latest economic bulletin could underpin EUR today, if it points to a steady economy and indicates that inflation is under control.
US dollar (USD) crawls up as House votes on shutdown
The US dollar ticked higher yesterday, posting a modest recovery following Tuesday’s retreat, as markets anticipated an end to the longest government shutdown in US history.
Having cleared the Senate, the funding bill went to the Republican-controlled House of Representatives, where it was also expected to pass.
USD could face volatility today after the House did vote to end the US government shutdown. While the news could support the US dollar, currently a broader risk-on mood is sapping safe-haven demand.
Canadian dollar (CAD) uncertain amid oil and USD correlations
The Canadian dollar (CAD) had another mixed session yesterday as the currency’s positive correlations with a rising US dollar and retreating oil prices pulled it in different directions.
Canadian data continues to be thin on the ground today, likely leaving the ‘loonie’ to trade on oil price dynamics and USD movement once again.
Australian dollar (AUD) jumps as unemployment drops
The Australian dollar (AUD) leapt higher overnight after Australian unemployment fell more than forecast in October, dipping from 4.5% to 4.3%.
New Zealand dollar (NZD) struggles amid disappointing data
The New Zealand dollar (NZD) wobbled overnight as a weaker-than-expected rebound in domestic card spending disappointed NZD investors.
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