Pound extends upside ahead of Autumn Budget

Pound (GBP) rises ahead of UK budget

The pound (GBP) strengthened yesterday as optimism ahead of today’s Autumn Budget boosted the UK currency.

GBP investors are hopeful that Chancellor Rachel Reeves will announce increased public investment. More spending and borrowing could boost the British economy, and potentially slow the pace of interest rate cuts from the Bank of England (BoE).

Reeves will finally unveil the budget today, potentially driving significant volatility in the pound. If markets react positively overall, Sterling could gain ground.

Euro (EUR) uncertain despite better-than-expected German data

The euro (EUR) was mixed yesterday, despite Germany’s latest consumer confidence index unexpectedly rising to its highest level since April 2022.

It seemed that EUR investors were reluctant to bet too heavily on the common currency ahead of some potentially damaging economic data today.

The focus ahead for EUR investors will be the Eurozone’s third-quarter GDP figures. If growth in the bloc remains weak, as expected, the euro could slide.

US dollar (USD) fluctuates higher amid risk aversion

The US dollar (USD) was volatile yesterday, with an unexpected decline in US job openings temporarily denting USD.

However, rising US Treasury yields and an increasingly risk-averse market mood saw the safe-haven ‘greenback’ strengthen overall.

US third-quarter GDP is also due out this afternoon. The American economy is expected to have grown 3% in the three months from July to September, which could see the US dollar surge.

Canadian dollar (CAD) mixed on oil and USD correlations

The Canadian dollar (CAD) traded without a clear direction yesterday. While weakening oil prices weighed on the crude-linked currency, CAD’s positive correlation with USD provided some support.

Looking forward, CAD’s correlation with USD could drive movement again this afternoon. Could strong US GDP see the Canadian dollar climb?

Australian dollar (AUD) hits multi-month lows as inflation cools

The Australian dollar (AUD) fell to fresh multi-month lows last night as cooling Australian inflation fuelled bets on interest rate cuts from the Reserve Bank of Australia (RBA). However, AUD has bounced back this morning.

New Zealand dollar (NZD) rebounds as USD declines

The New Zealand dollar (NZD) also hit multi-month lows overnight before quickly rebounding thanks to a drop in the US dollar this morning.