Pound (GBP) stable as BoE leaves rates on hold
The pound (GBP) held its ground on Thursday, after the Bank of England (BoE) left interest rates on hold following its latest policy meeting.
While widely anticipated, the decision was far from unanimous. The Monetary Policy Committee was split 5-4 in favour of keeping rates on hold, stoking bets the bank will deliver one more cut before the end of the year.
With no major UK economic releases on the docket for today, Sterling is likely to take its cues from market sentiment and ongoing speculation surrounding Chancellor Rachel Reeves’s autumn budget, which continues to cast a shadow over GBP performance.
Euro (EUR) gains capped by underwhelming data
The euro (EUR) ticked higher on Thursday, underpinned by its negative correlation with the US dollar (USD).
However, the single currency’s upside potential remained limited, amid the release of weaker-than-expected German industrial production and Eurozone retail sales figures.
Germany’s latest trade figures may offer support to the euro today. Although the country’s trade surplus narrowed in September, a recovery in exports could help lift the single currency as we head into the weekend.
US dollar (USD) rally runs out of steam
The US dollar softened yesterday as part of a wider market correction that has filtered through equity markets in recent days.
This comes amid concerns that the recent hawkish repricing of Federal Reserve interest rate expectations may have been a little overdone, as well as mounting concerns over the US government shutdown.
The University of Michigan will publish its latest US consumer sentiment index later this afternoon, and the US dollar could face headwinds if morale dropped this month.
Canadian dollar (CAD) muted as oil prices soften
The Canadian dollar (CAD) was subdued on Thursday as a dip in oil prices weakened the appeal of the commodity-linked currency.
Canada’s latest jobs report will be in the spotlight for CAD investors at the end of this week, with CAD exchange rates poised to slide if the labour market continued to cool in October.
Australian dollar (AUD) undermined by weak Chinese trade data
The Australian dollar (AUD) struggled to attract support overnight on Thursday amid concerns over China’s lacklustre trade data and its ramifications for Australia's economy.
New Zealand dollar (NZD) pressured by risk-off flows
The New Zealand dollar (NZD) also softened in overnight trade as signs of weakness in China’s economy sapped market risk appetite.
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