Pound (GBP) bolstered by stronger PMI
The pound (GBP) managed to stage a recovery during yesterday’s session, thanks to an upwardly revised UK services PMI showing growing activity in October.
However, ongoing concerns about the upcoming autumn budget and hesitancy ahead of today’s Bank of England (BoE) decision kept a lid on the UK currency.
Today, GBP investors are laser-focused on the BoE decision. If the bank holds interest rates but strikes a dovish tone, Sterling could slip. A surprise rate cut would likely lead to steeper losses.
Euro (EUR) unclear despite upbeat data
The euro (EUR) traded without a clear direction yesterday, as positive economic data and geopolitical fears pulled the currency in opposing directions.
Although German factory orders rebounded in September and the Eurozone’s final services PMI was revised higher, news of drones disrupting civil airports and military bases in Belgium unnerved EUR investors, amid suspicion of Russian involvement.
A weaker-than-expected rebound in German industrial production in September has slightly muted the euro this morning. Soft Eurozone retail sales growth could also subdue single currency.
US dollar (USD) subdued despite stronger data
The US dollar (USD) initially held steady yesterday, wavering against most peers near multi-month highs, as an uncertain mood gripped markets.
In the afternoon, stronger-than-expected results in the latest ADP employment change report and ISM services PMI helped to cheer markets, which dampened the appeal of the safe-haven dollar against riskier rivals.
US economic data is absent from the calendar today, likely leaving the American dollar to trade on market risk appetite. Could a gloomy mood lend USD safe-haven support?
Canadian dollar (CAD) slips following federal budget
The crude-linked Canadian dollar (CAD) traded in a narrow range yesterday, as wavering oil prices and a lack of Canadian data stifled CAD’s movement.
Canada’s Ivey PMI for October is due out later today. An expected slowdown in activity could pressure the ‘loonie’.
Australian dollar (AUD) struggles despite positive trade data
The Australian dollar (AUD) drifted slightly lower overnight, despite upbeat domestic trade data, as falling commodity prices dragged on the resource-linked ‘Aussie’.
New Zealand dollar (NZD) dented by softer commodity prices
The New Zealand dollar (NZD) weakened during last night’s Asian trading session, with weaker commodity prices sapping support for the ‘kiwi’.
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