Pound (GBP) uncertain due to lack of data
The pound (GBP) lacked a clear direction yesterday as an absence of UK data left the currency rudderless.
Domestic news also failed to provide fresh impetus. While anxiety ahead of the autumn budget weighed on GBP, bets that the Bank of England (BoE) will leave rates unchanged at this week’s meeting helped offset the downside.
Chancellor Rachel Reeves is laying the groundwork for upcoming tax hikes in a speech this morning, with the pound potentially experiencing some volatility depending on if it triggers a fresh increase in UK borrowing costs.
Euro (EUR) flat as PMI meets forecasts
The euro (EUR) also moved without a clear directional bias yesterday as a muted tone prevailed in the currency market.
The Eurozone’s final manufacturing PMI failed to move the dial on EUR, with results printing in line with preliminary estimates to show that factory activity stalled in October.
Turning to today, a speech from European Central Bank (ECB) President Christine Lagarde could impact EUR exchange rates. If the ECB chief maintains her hawkish tone, the single currency could strengthen.
US dollar (USD) enjoys Fed decision afterglow
The US dollar (USD) ticked higher yesterday as last week’s Federal Reserve decision continued to provide modest tailwinds, with markets adjusting their expectations for another rate reduction in 2025.
However, a weaker-than-expected ISM manufacturing PMI placed some pressure on the ‘greenback’ in the afternoon. US factory activity contracted more than forecast in October.
Federal Reserve policymaker Michelle Bowman is due to deliver a speech later today. As she is one of the more dovish officials at the Fed, her comments could weigh on USD.
Canadian dollar (CAD) declines in tandem with oil
The crude-linked Canadian dollar (CAD) softened yesterday as falling oil prices dragged on the currency.
Oil price dynamics could drive the ‘loonie’ again today. If crude continues to weaken, CAD may face further losses.
Australian dollar (AUD) slips despite RBA rate hold
The Australian dollar (AUD) weakened overnight amid a risk-off mood, despite the Reserve Bank of Australia (RBA) leaving interest rates on hold and indicating that further cuts could be unlikely.
New Zealand dollar (NZD) falls amid risk aversion
The New Zealand dollar (NZD) also fell overnight as a souring mood dampened demand for the riskier ‘kiwi’. ) wavered in overnight trade, as an unexpectedly strong recovery in New Zealand business confidence in October failed to provide NZD with meaningful gains.
Never miss a movement. Create a free account with Currencies Direct to get the latest currency news delivered straight to your inbox. You can also set up rate alerts and check live rates 24/7.
