Pound (GBP) dented by budget concerns
The pound (GBP) was muted on Thursday as markets factored in a growing risk premium ahead of Chancellor Rachel Reeves’s autumn budget.
Reports that the government is considering abolishing the two-child cap on child benefits raised fresh concerns over how the Chancellor will fund its commitments.
GBP investors will look to a speech by Bank of England (BoE) Governor Andrew Bailey for fresh impetus today. A hawkish tilt to his remarks could help send Sterling higher as we go into the weekend.
Euro (EUR) falters as unemployment ticks higher
The euro’s (EUR) recent positive momentum came to a halt on Thursday, with the release of the Eurozone’s latest jobs data.
August’s figures reported unemployment across the bloc ticked up to 6.3%, missing forecasts that it would hold at a record low of 6.2%.
A speech by European Central Bank (ECB) President Christine Lagarde will be the focus for EUR investors, with the euro likely to strengthen if she hints at all that the bank’s cutting cycle is complete.
US dollar (USD) undermined by labour jitters
The US dollar (USD) faced headwinds again on Thursday as the US government shutdown and domestic labour concerns continued to sap USD sentiment.
With the shutdown delaying the release of Thursday’s jobless claims and today’s payroll figures, Wednesday’s ADP data and its report of a shock slump in employment in September continued to hang over USD.
With non-farm payrolls no longer on the docket, the spotlight today turns to the latest ISM services PMI. A robust expansion of the US service sector last month could help the US dollar claw back some of its recent losses.
Canadian dollar (CAD) retreats as oil prices slide
The Canadian dollar (CAD) stumbled on Thursday with the appeal of the commodity-linked currency crumbling as oil prices slumped to a four-month low.
Oil prices are likely to continue to soften ahead of an OPEC meeting over the weekend, likely leaving the ‘loonie’ to close the week on a sour note.
Australian dollar (AUD) flat as services PMI revised higher
The Australian dollar (AUD) traded sideways overnight on Thursday, following PMI data that showed service sector activity was revised slightly higher, but still confirmed growth slumped to a three-month low in September.
New Zealand dollar (NZD) buoyed by risk-on flows
The New Zealand dollar (NZD) edged higher during today’s Asian trading session, supported by a cautiously optimistic market mood.
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