Pound (GBP) stable as UK PMI revised higher
The pound (GBP) traded in a narrow range yesterday. Supporting Sterling sentiment was an upwardly revised services PMI, which saw the UK’s private sector avoid a contraction last month.
However, the pound’s upside potential remained limited following remarks from Bank of England (BoE) Governor Andrew Bailey. Bailey said he expects four UK rate cuts in 2025 as inflation eases.
Looking ahead, a speech by Keir Starmer will be closely watched by GBP investors today as the UK Prime Minister is set to outline the government’s ‘plan for change’, which will include housebuilding and planning reforms aimed at boosting growth.
Euro (EUR) undermined by ECB comments
The euro (EUR) struggled to attract support on Wednesday in light of dovish comments from a European Central Bank (ECB) official.
In addition to suggesting there is ‘more grounds for a December rate cut’, ECB policymaker Olli Rehn also stated that he sees the bank continuing to ease policy in the coming months.
The Eurozone will publish its latest retail sales figures later this morning. Sales growth is forecast to have contracted in October, which may drag on the single currency today.
US dollar (USD) slips on disappointing data
The US dollar (USD) was undermined by lacklustre US economic releases during yesterday’s session.
In addition to the latest ADP employment figures missing expectations last month, November’s ISM services PMI also reported a notable slowdown in service sector activity.
Turning to today’s session, the latest US initial jobless claims may provide a boost for the US dollar if they signal the US labour market remains resilient.
Canadian dollar (CAD) dented by soft oil prices
The Canadian dollar (CAD) trended lower on Wednesday, with the appeal of the commodity-sensitive currency being undermined by falling oil prices.
Assuming oil prices continue to soften, the downtrend in CAD may persist today.
Australian dollar (AUD) rebounds on positive trade figures
The Australian dollar (AUD) rallied from a one-year low overnight on Wednesday, supported by stronger-than-expected domestic trade figures.
New Zealand dollar (NZD) buoyed by cautious optimism
The New Zealand dollar (NZD) also ticked higher overnight, underpinned by improving risk appetite.
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