Pound (GBP) muted despite better GDP
The pound (GBP) was subdued yesterday, with GBP investors seemingly unimpressed with an upward revision to year-on-year GDP growth in the second quarter.
Swirling concerns about coming tax rises in the government’s autumn budget continued to be a thorn in the pound’s side, stifling its upside potential.
With UK data in short supply today, Sterling may struggle to find a clear directional bias.
Euro (EUR) choppy despite higher German inflation
The euro (EUR) wavered yesterday, with the common currency wobbling due to its strong negative correlation with a shifting US dollar (USD).
Germany’s consumer price index failed to lift EUR in the afternoon, despite a larger-than-expected rise in inflation in September.
Looking ahead, the Eurozone CPI is the focus for EUR investors today. An uptick in inflation across the bloc could boost the euro by cementing bets that the European Central Bank’s (ECB) interest rate cutting cycle is over.
US dollar (USD) slips as US government shuts down
The US dollar wavered slightly lower yesterday amid a shifting market mood and mixed economic data, with job openings unexpectedly rising in August while consumer confidence deteriorated more than forecast in September.
Overnight, Democrats refused to support the Republican funding bill, leading to a US government shutdown and putting pressure on the US dollar.
Today, USD investors will be looking to the latest ADP employment change figure and ISM manufacturing PMI for fresh impetus. Weak readings from both data releases could undermine the US dollar.
Canadian dollar (CAD) dented by weakening oil
The crude-linked Canadian dollar (CAD) softened against some of its peers yesterday as a decline in oil prices dragged on the currency.
Canada’s latest manufacturing PMI is due for release later today. CAD could come under pressure if factory activity remained in contraction in September.
Australian dollar (AUD) weakens amid economic headwinds
The Australian dollar (AUD) slipped during last night’s trading session amid a larger-than-forecast decline in Australia’s Ai group industry index and news that China has paused imports of iron ore from Australian mining giant BHP.
New Zealand dollar (NZD) recovers as risk appetite remains
The New Zealand dollar (NZD) initially slipped in tandem with the ‘Aussie’ overnight, but NZD managed to rebound amid a resilient appetite for risk.
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