Pound (GBP) plunges as UK jobs market cools
The pound (GBP) slumped on Tuesday as signs of a slowing UK jobs market revived bets on another Bank of England (BoE) interest rate cut in 2025.
The latest labour market overview showed that British unemployment rose to a four-year high in the three months to August, while regular wage growth eased.
Today, BoE Deputy Governors Dave Ramsden and Sarah Breeden are due to speak. If either policymaker expresses concern over yesterday’s jobs data, Sterling could stumble.
Euro (EUR) firms as German economic sentiment improves
The euro (EUR) rose against its weaker rivals yesterday, thanks to a risk-off mood and an improvement in German economic sentiment in August.
The latest ZEW survey score showed a rise from 37.3 to 39.3. Although this was lower than the expected score of 40.5, it still provided EUR with support.
Looking forward, the common currency could face headwinds later today as new data is expected to show that Eurozone industrial production slumped 1.5% in August.
US dollar (USD) relinquishes risk-off gains
The US dollar (USD) rose yesterday as a risk-off market mood provided the currency with safe-haven flows, amid rising US-China trade tensions and a warning from the International Monetary Fund (IMF) that the outlook for global growth remains ‘dim’.
However, the American currency surrendered a large portion of these gains in the afternoon as jitters over the trade spat and the ongoing government shutdown unnerved USD investors.
Turning to today, a number of Federal Reserve policymakers are due to deliver speeches later this evening, including Trump ally Stephen Miran. A broadly dovish tone could drag on the US dollar.
Canadian dollar (CAD) mixed on USD and oil correlations
The crude-linked Canadian dollar (CAD) firmed against weaker rivals yesterday thanks to its positive correlation with USD, but fell against stronger peers amid a decline in oil prices.
Market-moving Canadian data is thin on the ground today, potentially leaving the ‘loonie’ to trade on crude price movements once again.
Australian dollar (AUD) buoyed by hawkish RBA comments
The Australian dollar (AUD) rose last night as Reserve Bank of Australia (RBA) Assistant Governor Sarah Hunter warned that inflation is likely to be stronger than forecast in the third quarter, thereby dampening rate cut bets.
New Zealand dollar (NZD) flat despite improving mood
The New Zealand dollar (NZD) wavered in a narrow range overnight, with the ‘kiwi’ unable to capitalise on an improvement in risk appetite.
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