Pound (GBP) undermined by slowing inflation
The pound (GBP) stumbled yesterday as a softening of UK inflation stoked bets for the Bank of England (BoE) rate cut next month.
Tempering these gains was a coinciding fall in UK gilt yields, which may relieve some pressure on Chancellor Rachel Reeves ahead of next week’s budget.
Looking ahead, with UK data in short supply today, budget speculation may lead to further volatility in the pound.
Euro (EUR) lifted by market risk aversion
The euro (EUR) firmed on Wednesday, with the single currency catching bids as a selloff in global equities rattled markets.
This gave the single currency some upward momentum, despite confirmation that Eurozone inflation eased to 2.1% in October.
Looking ahead, with Eurozone economic releases thin on the ground until the end of the week, movement in the euro may be driven by wider market trends today.
US dollar (USD) strengthens in cautious trade
The US dollar (USD) appreciated through yesterday’s session as skittish investors favoured the safe-haven currency.
Reinforcing these gains were the minutes from the Federal Reserve’s latest policy meeting, which showed that many policymakers seemed resistant to further easing, leading bets for a December rate cut to fall dramatically.
After much delay, today finally brings the release of September’s non-farm payroll report. While technically out of date, the figures will be closely watched by USD investors, as any underperformance could swiftly revive bets for a Fed rate cut next month.
Canadian dollar (CAD) pressured by slump in oil prices
The Canadian dollar (CAD) ticked lower on Wednesday, with the commodity-linked currency being pressured by a sharp drop in oil prices.
If crude continues to slump, the ‘loonie’ will likely face further resistance today.
Australian dollar (AUD) buoyed by hawkish RBA remarks
The Australian dollar (AUD) trended higher overnight on Wednesday, as Reserve Bank of Australia (RBA) Assistant Governor Sarah Hunter warned about potential inflation risks facing the Australian economy.
New Zealand dollar (NZD) wobbles in uneven trade
The New Zealand dollar (NZD) fluctuated in overnight trade, with the ‘kiwi’ initially stumbling amid a cautious mood, before bouncing back as sentiment began to recover through Thursday’s Asian trading session.
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