Pound (GBP) stabilises as UK bond yields begin to fall
Following Tuesday’s bond-driven selloff, the pound (GBP) was able to stabilise yesterday as long-dated UK debt yields retreated from a 27-year high.
Sterling sentiment was also underpinned by the UK’s latest services PMI as August’s finalised index was revised up to a 16-month high.
UK economic data is in short supply today, likely leaving the pound to continue to take its cues from the UK bond market.
Euro (EUR) muted on mixed data
The euro (EUR) was subdued on Wednesday in response to mixed Eurozone economic indicators.
While Eurozone service sector growth was revised down from preliminary estimates in August, producer price inflation proved stickier than forecast.
The Eurozone’s latest retail sales figures are likely to act as a headwind for the euro today, with consensus forecasts predicting a 0.2% contraction in sales growth in July.
US dollar (USD) falters as US job openings slump
The US dollar (USD) came under broad pressure through yesterday’s session as another fall in job openings added to concerns over the slowing US labour market and the implications for US monetary policy.
This compounded losses from earlier in the session as a positive shift in risk appetite tempered demand for safe-haven assets.
The release of the latest ADP employment report will be in focus for USD investors today. Expect the US dollar to weaken if August’s figures reinforce the bearish narrative surrounding the US labour market.
Canadian dollar (CAD) pressured by soft oil prices
The Canadian dollar (CAD) stumbled on Wednesday, with the commodity-linked currency weakening in tandem with oil prices.
The direction of the ‘loonie’ is likely to remain tied to oil price dynamics today, potentially leading to further losses for CAD if prices continue to slide.
Australian dollar (AUD) slides despite upbeat trade figures
The Australian dollar (AUD) retreated overnight on Wednesday as a souring market mood overshadowed a larger-than-expected expansion in Australia’s trade surplus in July.
New Zealand dollar (NZD) pressured by risk-off flows
The New Zealand dollar (NZD) also weakened in overnight trade as the deterioration in market sentiment dented demand for the ‘kiwi’.
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