Pound (GBP) weakens amid gloomy economic outlook
The pound (GBP) fell yesterday as a lack of UK data left GBP investors to focus on dour domestic headlines.
News stories about the tough business environment in the UK, including weaker job creation and scrapped investment plans, put pressure on the pound.
The Confederation of British Industry’s (CBI) latest distributive trades survey is expected to show an improvement in September, potentially providing the pound with modest support today.
Euro (EUR) slides as German data disappoints
The euro (EUR) found itself under pressure yesterday after Germany’s business climate index unexpectedly deteriorated to a four-month low in September.
In addition, EUR investors were unnerved by growing animosity between NATO and Russia, as the Kremlin said there is ‘no alternative’ than to continue its offensive in Ukraine following the recent escalation in tensions.
Turning to today, the euro may find support this morning after Germany’s latest consumer confidence index improved more than expected heading into October. However, Russia worries could keep EUR on the back foot.
US dollar (USD) firms amid mixed Fed commentary
The US dollar (USD) marched higher on Wednesday as mixed comments from Federal Reserve officials, including a warning on persistent inflation from Fed Chair Jerome Powell, pointed to a cautious approach to interest rate cuts.
In addition, the safe-haven ‘greenback’ benefitted from a souring market mood as Russia-NATO tensions ratcheted up.
Looking ahead, mixed US data could see USD waver today. Another contraction in durable goods orders and a rise in initial jobless claims could weigh on the US dollar, while confirmation of a strong expansion in US GDP in the second quarter may bolster the ‘greenback’.
Canadian dollar (CAD) buoyed as crude prices climb
The oil-linked Canadian dollar (CAD) rose against its weaker peers yesterday as a continued rise in crude prices underpinned the currency.
Canada’s latest wage data could impact CAD today, with signs of cooling wage growth potentially undermining the ‘loonie’ by adding to Bank of Canada (BoC) rate cut expectations.
Australian dollar (AUD) rises as risk appetite returns
The Australian dollar (AUD) found support overnight as an improving market mood lifted the risk-sensitive ‘Aussie’.
New Zealand dollar (NZD) lifted by improving mood
The New Zealand dollar (NZD) also ticked higher last night thanks to the increased appetite for risk.
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