Pound (GBP) trends lower as UK budget unveiled
The pound (GBP) softened ahead of the UK Autumn Budget yesterday, with GBP investors remaining cautious as they awaited the announcement.
Sterling then struggled to regain ground after the budget was unveiled, despite markets broadly welcoming Chancellor John Healey’s fiscal plans, as the Office for Budget Responsibility (OBR) sharply downgraded its UK growth forecast for 2027.
Turning to today, the pound could face limited movement amid a lack of fresh UK data.
Euro (EUR) edges up despite lacklustre German data
After touching fresh multi-month lows, the euro (EUR) then managed to crawl up yesterday as easing French bond yields gave the currency some respite.
However, a decline in German consumer confidence heading into November limited EUR’s recovery.
Looking forward, the focus today will be on the European Central Bank’s (ECB) interest rate decision. While a hawkish pause could support the euro, EUR could be vulnerable to losses should the bank strike a more cautious tone.
US dollar (USD) dips after Fed decision
The US dollar (USD) traded broadly sideways yesterday as USD investors braced for the Federal Reserve’s interest rate decision.
The Fed held rates, as expected, but a slightly dovish tilt to the decision saw USD decline as investors trimmed bets on a December hike.
Today, the focus shifts to the latest US GDP figures and core PCE price index. Accelerating economic growth in the third quarter and rising inflation in September could provide USD with a fresh boost.
Canadian dollar (CAD) underpinned by BoC hike
The Canadian dollar (CAD) firmed against its weaker rivals yesterday as the Bank of Canada (BoC) raised interest rates to 2.5%, as expected.
Looking forward, oil price dynamics could drive the crude-linked Canadian dollar today. If prices remain high, CAD could attract support.
Australian dollar (AUD) pulls back amid profit-taking
The Australian dollar (AUD) touched monthly highs against some peers overnight before retreating as profit-taking set in.
New Zealand dollar (NZD) muted despite positive data
The New Zealand dollar (NZD) was subdued overnight, despite an unexpected improvement in New Zealand business confidence in October, as the Reserve Bank of New Zealand’s (RBNZ) surprise rate hold continued to dampen NZD demand.
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