Pound (GBP) benefits from market optimism
The pound (GBP) firmed yesterday as Sterling sentiment was improved by an uptick in global risk appetite.
However, a continued decline in UK retail sales volumes this month ensured the pound’s upside potential remained relatively modest in scope.
UK economic releases are in short supply today, likely shifting the focus back to Chancellor Rachel Reeves’s upcoming budget and what measures it will include to plug the roughly £20bn gap in government finances.
Euro (EUR) steady as German business morale rises
The euro (EUR) was stable on Monday, as an improvement in German business sentiment offset the pressures on the single currency amid a strengthening of market risk appetite.
The IFO business climate index rose above forecasts this month, reflecting the improving outlook in the manufacturing sector as the recent decline in new orders finally came to a halt.
Germany’s latest consumer confidence data could support the euro today if morale heading into November improves as forecast.
US dollar (USD) slips amid waning safe-haven demand
The US dollar (USD) retreated through yesterday’s session as the optimistic market mood made the safe-haven currency less attractive to investors.
USD sentiment was also suppressed amid uncertainty surrounding the ongoing US government shutdown and its potential impact on the US economy.
Movement in the US dollar is likely to be limited today, as USD investors err on the side of caution ahead of the Federal Reserve’s interest rate decision on Wednesday.
Canadian dollar (CAD) pressured by additional Trump tariffs
The Canadian dollar (CAD) struggled on Monday as CAD investors reacted to Trump’s move over the weekend to raise tariffs on Canadian goods by another 10%.
Looking ahead, CAD investors may be reluctant to make any aggressive bets today, as they brace for an expected interest rate cut from the Bank of Canada (BoC) in the middle of the week.
Australian dollar (AUD) gains tempered by profit-taking
The Australian dollar (AUD) initially maintained a positive trajectory overnight on Monday, before some profit-taking began to chip away at these gains by the end of the Asian trading session.
New Zealand dollar (NZD) fluctuates as investors book profits
The New Zealand dollar (NZD) moved in tandem with the Australian dollar overnight, with the initial NZD upside fading as investors booked recent profits.
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