Pound (GBP) underpinned by BoE Ramsden’s inflation warning
Trade in the pound (GBP) was broadly positive yesterday, in response to remarks from Bank of England (BoE) Deputy Governor Dave Ramsden, warning that UK inflation will continue to accelerate for a little while longer.
However, the pound’s upside potential remained limited as the Labour Party conference got underway, with GBP investors concerned about a potential shift to the left that could see the government commit to more spending.
Turning to today, a modest revision to year-on-year UK GDP has so far had limited impact on the pound, with GBP investors instead focused on a series of speeches by BoE policymakers later in the session.
Euro (EUR) underpinned by USD weakness
The euro (EUR) strengthened on Monday, with the single currency attracting support as the US dollar (USD) faltered.
Additional support came courtesy of the Eurozone’s latest economic sentiment index, amid a surprise improvement in morale this month.
Coming up, Germany’s consumer price index could provide some lift for the euro later today as an expected uptick in inflation is likely to cement bets the European Central Bank’s (ECB) interest rate cutting cycle is over.
US dollar (USD) slides on government shutdown threat
The US dollar stumbled out of the gate this week as the US stares down a potential government shutdown on Tuesday evening.
USD investors were also wary ahead of a string of US labor releases, some of which could be delayed in the event of a shutdown.
Potentially adding to the pressure on the US dollar today will be an expected fall in US job listings in the latest US Job Openings and Labor Turnover survey (JOLTs).
Canadian dollar (CAD) softens as oil prices slip
The Canadian dollar (CAD) weakened on Monday, with the commodity-linked currency tracking oil prices lower.
Expect the ‘loonie’ to extend these losses through today’s session if oil prices continue to depreciate.
Australian dollar (AUD) rallies on hawkish RBA rate decision
The Australian dollar (AUD) accelerated through today’s Asian trading session, in the wake of the Reserve Bank of Australia’s (RBA) latest interest rate decision. In addition to keeping rates on hold, the bank struck a hawkish note, warning that inflation in the third quarter is likely to be higher than expected.
New Zealand dollar (NZD) firms in risk-on trade
The New Zealand dollar (NZD) also appreciated overnight on Monday with a positive market mood offsetting weaker-than-expected domestic business confidence figures.
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