Pound (GBP) slips amid fiscal fears
The pound (GBP) weakened yesterday as British government bond yields remained elevated, raising concerns about the UK’s fiscal position.
In addition, the increasingly risk-sensitive pound softened amid the risk-off market mood.
Looking ahead, Bank of England (BoE) Chief Economist Huw Pill will deliver a speech later today. Any hints that another interest rate cut is unlikely this year could see Sterling rise.
Euro (EUR) struggles as French political crisis continues
The euro (EUR) was subdued yesterday, weakening against its stronger rivals and wavering elsewhere, as the political uncertainty in France continued.
Following the shock resignation of French Prime Minister Sébastien Lecornu on Monday, the far-right National Rally party – the largest party in parliament – declined an invitation from Lecornu to participate in talks to solve the political crisis.
The common currency started today’s session on the back foot after German industrial production slumped by 4.3% in August. Later, a speech from European Central Bank (ECB) President Christine Lagarde could offer EUR some much-needed support, if she strikes a hawkish tone.
US dollar (USD) climbs in risk-averse trade
The US dollar (USD) strengthened yesterday as safe-haven demand boosted the currency’s appeal.
Investors opted for the safer ‘greenback’ amid concerns about a fresh 25% US tariff on imported trucks, as well as political uncertainty in Europe and Japan.
Turning to today, the Federal Reserve’s September policy meeting minutes are due to be published. If they show that many Fed officials are cautious about ongoing interest rate cuts, USD could garner further support.
Canadian dollar (CAD) rises despite downbeat trade figures
The Canadian dollar (CAD) strengthened yesterday, shrugging off weak trade figures, thanks to CAD’s positive correlation with USD and optimism over talks between Canadian Prime Minister Mark Carney and US President Donald Trump.
Amid an absence of Canadian data today, oil price movements may drive the commodity-linked ‘loonie’. If crude rises, the Canadian dollar could climb in tandem.
Australian dollar (AUD) weakens amid gloomy mood
The Australian dollar (AUD) slipped against many of its peers overnight as the market mood remained risk-off.
New Zealand dollar (NZD) craters as RBNZ slashes interest rates
The New Zealand dollar (NZD) collapsed overnight after the Reserve Bank of New Zealand (RBNZ) delivered an aggressive 50bps interest rate cut and signalled that more easing is likely.
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