Pound (GBP) slips as retail activity continues to decline
The pound (GBP) faltered on Thursday as the Confederation of British Industry’s (CBI) distributive trades index fell short of expectations.
The continued slump in retail sales volumes compounded concerns over the UK’s recent economic malaise and the challenges facing Chancellor Rachel Reeves.
Sterling may struggle to gain traction at the end of this week as a lull in data is likely to leave the currency without a strong directional bias.
Euro (EUR) undermined by USD strength
The euro (EUR) stumbled through yesterday’s session due to its negative correlation with the US dollar (USD).
The downside in the single currency was somewhat limited by the release of the latest German consumer confidence index, which reported that sentiment improved more than forecast going into October.
EUR investors will look to a speech by European Central Bank (ECB) President Christine Lagarde for fresh impetus today. If she strikes a hawkish tone, the euro is likely to strengthen.
US dollar (USD) bolstered by upbeat data
The US dollar appreciated yesterday as US data surprised to the upside, prompting a trimming of Federal Reserve interest rate cut expectations.
This included an upwardly revised second-quarter GDP reading, a shock recovery in durable goods orders in August and an unexpected fall in new jobless claims last week.
The Fed's preferred indicator for inflation, the core PCE price index, will be centre stage for USD investors today. Another uptick in inflation could further temper Fed rate cut bets and preserve the US dollar’s positive momentum.
Canadian dollar (CAD) buoyed by positive USD correlation
The Canadian dollar (CAD) trended higher on Thursday, with the currency’s positive trading relationship with the US dollar offsetting a softening of oil prices.
Canada’s latest GDP figures could provide additional support to the ‘loonie’ later today. If July’s recovery of growth accelerated into August, it will ease fears that Canada is at risk of slipping into a technical recession.
Australian dollar (AUD) subdued amid fresh risk aversion
The Australian dollar (AUD) struggled to gain traction overnight on Thursday, as the announcement of new tariff plans by US President Donald Trump weighed on market risk appetite.
New Zealand dollar (NZD) muted in cautious trade
The New Zealand dollar (NZD) was also subdued in overnight trade, with the ‘kiwi’ undermined by market caution and weaker-than-expected domestic consumer confidence figures.
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.
