Pound (GBP) muted amid lack of data
The pound (GBP) was subdued yesterday, with a lack of UK economic data leaving GBP to drift without direction.
However, the increasingly risk-sensitive currency was spared notable losses thanks to a relatively upbeat market mood.
Sterling could face pressure today following the latest government borrowing figures. Last month, UK borrowing rose to £20.2bn – the highest September borrowing since 2020 – potentially fuelling fiscal fears ahead of the autumn budget.
Euro (EUR) quiet following German PPI figures
The euro (EUR) was also muted during yesterday’s session, with investors responding to Germany’s latest producer price index.
Although factory gate inflation fell 1.7% in September, this was less steep than the 1.9% drop expected and a slower pace of deflation than the 2.2% fall in August.
Today, EUR investors could focus their attention on a speech from European Central Bank (ECB) President Christine Lagarde. Hawkish comments could underpin the euro.
US dollar (USD) buoyed by thawing US-China tensions
The US dollar (USD) traded with modest gains yesterday as easing US-China trade tensions helped to bolster USD demand.
After Washington and Beijing traded tariff threats last week, reports over the weekend that the two sides were looking to negotiate a truce supported the ‘greenback’.
American data remains thin on the ground today, leaving USD investors to focus on global risk dynamics and a speech from Federal Reserve policymaker Christopher Waller.
Canadian dollar (CAD) wobbles on oil and USD correlations
The crude-linked Canadian dollar (CAD) wavered yesterday, as softening oil prices and a rising US dollar pulled CAD in different directions.
Turning to today, Canada’s latest consumer price index is due to be published. An expected jump in inflation in September could boost CAD by dampening Bank of Canada (BoC) interest rate cut bets.
Australian dollar (AUD) retreats amid lack of data
After firming through yesterday’s European session, the Australian dollar (AUD) trimmed its gains overnight amid a lack of Australian economic data.
New Zealand dollar (NZD) slips as trade deficit widens
Likewise, the New Zealand dollar (NZD) retreated from weekly highs overnight. A deepening New Zealand trade deficit in September dented the ‘kiwi’.
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