Pound (GBP) wobbles in post-budget trade
After striking a four-week high in the wake of Wednesday’s budget, the pound (GBP) was left treading water yesterday as investors continued to digest the UK government’s fiscal plans.
While the UK bond market remained calm, there was growing concern over Chancellor Rachel Reeves’s ‘back-loaded’ tax hikes, as well as rising expectations of a Bank of England (BoE) interest rate cut next month.
UK economic releases are in short supply today, potentially leaving movement in Sterling to continue to be influenced by budget analysis through the remainder of the week.
Euro (EUR) underpinned by ECB minutes
The euro (EUR) traded with modest support on Thursday as the minutes from the European Central Bank’s (ECB) October policy meeting confirmed unanimous support for keeping rates on hold.
This helped the euro counter Germany’s latest consumer climate index, which only reported a modest improvement in morale going into December.
Coming up, there are several German economic releases of note today, but the most impactful may be November’s preliminary CPI data. An uptick in inflation this month could help underpin EUR demand.
US dollar (USD) muted in holiday-thinned trade
The US dollar (USD) was subdued yesterday as the Thanksgiving holiday in the US resulted in thin trading conditions for the currency.
USD also remained suppressed amid renewed bets that the Federal Reserve will cut interest rates at its December meeting.
While US markets reopen today, movement in the US dollar may remain limited amid a lull in US economic data.
Canadian dollar (CAD) flat as oil prices stall
The Canadian dollar (CAD) traded sideways on Thursday, with the commodity-linked currency struggling to attract support as oil prices flatlined.
Closing out this week is the release of Canada’s latest GDP figures. Could a rebound in growth in the third quarter help the ‘loonie’ to end the session on a positive note?
Australian dollar (AUD) unsure amid shifting mood
The Australian dollar (AUD) wavered overnight as a shifting market mood and lack of Australian data left the currency without a clear directional bias.
New Zealand dollar (NZD) inches lower amid profit-taking
The New Zealand dollar (NZD) retreated slightly from recent highs overnight, despite a better-than-expected consumer confidence index, as NZD investors sought to book their profits following a strong week for the ‘kiwi’.
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