Pound (GBP) subdued as public borrowing jumps
The pound (GBP) wavered yesterday, as a surge in UK government borrowing in August dampened Sterling sentiment.
However, GBP managed to avoid losses thanks to better-than-forecast manufacturing data from the Confederation of British Industry (CBI) and falling oil prices.
Looking ahead, GBP investors will likely focus their attention on the UK’s preliminary services PMI for September this morning. If activity moderated this month, Sterling could stumble.
Euro (EUR) uncertain in absence of data
The euro (EUR) also faced uncertain movement yesterday, as a lack of Eurozone data left the currency to be driven by external factors.
While easing oil prices soothed concerns about an energy crunch across the Eurozone, the single currency was also pressured by its strong negative correlation with the US dollar (USD), which ticked higher.
The Eurozone’s latest PMIs are also due out this morning, with a slight slowdown in growth potentially subduing the single currency.
US dollar (USD) wavers higher as jobs growth improves
Despite some initial turbulence, the US dollar managed to strengthen yesterday, thanks in part to new data showing a continued improvement in US employment growth.
USD was also underpinned by comments from US President Donald Trump, who threatened to ‘annihilate’ Iran if they didn’t make a deal, and indicated that any such deal would likely come after the November midterm elections.
Although less influential than the ISM surveys, the latest S&P Global PMIs for the US could impact the ‘greenback’ today. Another month of robust activity could underpin the US dollar.
Canadian dollar (CAD) flat amid wavering oil prices
The crude-linked Canadian dollar (CAD) showed resilience yesterday despite lower oil prices, with the ‘loonie’ trading sideways against many of its peers.
With oil extending its downside today, the Canadian dollar could come under pressure. Further losses for crude could weigh heavily on CAD.
Australian dollar (AUD) drops as European trade begins
The Australian dollar (AUD) initially held steady in overnight trade, despite weaker PMI figures, before sliding at the start of the European session.
New Zealand dollar (NZD) stumbles amid uncertain mood
The New Zealand dollar (NZD) retreated overnight as hopes of US-Iran peace talks failed to prompt a decisively risk-on market mood.
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