Pound (GBP) pressured by BoE rate cut bets
The pound (GBP) trended lower at the end of last week amid a delayed response to the Bank of England’s (BoE) dovish signals following its interest rate decision on Thursday.
Bets for a December rate cut climbed through Friday’s session, while economists predicted the BoE could cut rates to 3% by next summer.
In the absence of any notable UK economic releases today, GBP investors may turn their attention back to UK fiscal policy, with concerns over the upcoming autumn budget potentially pressuring Sterling.
Euro (EUR) bolstered by USD weakness
The euro (EUR) rallied on Friday, with the single currency drawing much of its strength from its negative correlation with the US dollar (USD).
Aiding the euro’s ascent was the release of Germany’s latest trade figures, which reported a much stronger-than-expected recovery in exports at the end of the third quarter.
EUR economic releases are thin on the ground today, potentially leaving the euro to trade without strong directional bias at the start of the week.
US dollar (USD) slides as US consumer sentiment plunges
The US dollar came under notable selling pressure on Friday, following the release of the University of Michigan’s latest US consumer sentiment index.
November’s index reported a much larger-than-expected decline in morale, with sentiment reaching its worst levels since the record low struck in June 2022 as the ongoing US government shutdown undermined confidence.
Turning to this week, the US dollar is catching bids after the US Senate narrowly passed a bill on Sunday that paves the way towards ending the longest US government shutdown on record.
Canadian dollar (CAD) jumps as jobs data surprises to the upside
The Canadian dollar (CAD) closed last week’s session on positive footing as CAD investors welcomed a surprise fall in domestic unemployment last month.
Looking ahead, the ‘loonie’ is likely to take its cues from oil price dynamics at the start of this week, potentially leading the currency to weaken if prices begin to fall again.
Australian dollar (AUD) rallies on hawkish RBA comments
The Australian dollar (AUD) got off to a strong start this week, with the currency rallying through Monday’s Asian trading session in response to remarks from Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser, who stressed the need to maintain tight policy conditions.
New Zealand dollar (NZD) rises amid risk-on mood
The New Zealand dollar (NZD) also firmed in overnight trade as a surprise recovery in Chinese inflation helped to underpin market risk appetite.
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