Pound (GBP) unsure despite growth upgrade
The pound (GBP) lacked a clear trajectory yesterday, while slipping against its stronger peers, as GBP investors digested the International Monetary Fund’s (IMF) revised growth forecast for the UK.
While the IMF upgraded its growth forecast for 2026, it also slightly downgraded its outlook for 2027.
A speech from Bank of England (BoE) Governor Andrew Bailey is the key event for GBP today, with any hawkish remarks potentially supporting Sterling.
Euro (EUR) recovery falters ahead of France budget debate
The euro (EUR) attracted some support early on during Tuesday’s session, thanks to a dip in French bond yields and EUR’s negative correlation with the weakening US dollar (USD).
However, the common currency relinquished its gains as investors braced for France’s parliamentary debate on the 2027 budget, which could reignite debt fears amid potential opposition from parties on the right and left.
Turning to today, European Central Bank (ECB) President Christine Lagarde is scheduled to speak. The euro may face headwinds if she raises concerns about the current debt crisis in France.
US dollar (USD) falls as risk appetite increases
The US dollar faced headwinds yesterday as an improving market mood dampened demand for the safe-haven currency.
The risk-positive tone came as oil prices eased from their recent two-week highs, while government bond markets around the world also showed signs of steadying.
The focus for USD investors today will be the latest US consumer price index. An expected acceleration in inflation in September could propel the ‘greenback’ higher.
Canadian dollar (CAD) rebounds as oil starts to rise
The commodity-linked Canadian dollar (CAD) initially faced pressure yesterday amid the pullback in global oil prices. However, crude prices jumped again in the afternoon, helping CAD find renewed strength.
Looking forward, a speech from Bank of Canada (BoC) Governor Tiff Macklem could impact the Canadian dollar today. If he hints that rate hikes may not be necessary, CAD could stumble.
Australian dollar (AUD) buoyed by risk-on mood
The Australian dollar (AUD) firmed overnight as an appetite for risk lifted the ‘Aussie’.
New Zealand dollar (NZD) firms amid cheery trade
Likewise, the New Zealand dollar (NZD) trended higher during Wednesday’s Asian trading session amid the positive shift in market sentiment.
Never miss a movement. Create a free account with Currencies Direct to get the latest currency news delivered straight to your inbox. You can also set up rate alerts and check live rates 24/7.
