Pound Pressured as High UK Inflation Begins to Bite

Pound (GBP) Downbeat as Cost Pressures Mount

The Pound (GBP) was subdued yesterday amid news that two-thirds of UK manufacturers expect to raise prices in the run-up to Christmas due to increasing inflationary pressures.

In addition, the UK’s construction PMI printed below forecasts as the supply chain crisis continues to cause disruption across all sectors of the country’s economy.

With no major market-moving data from the UK today, domestic news could be the primary driver of GBP exchange rates.

Euro (EUR) Slips as German Factory Orders Slump

The Euro (EUR) weakened through yesterday’s session after Germany’s factory orders for August fell by 7.7%, far worse than analysts’ forecasts of -2.1%.

Retail sales in the Eurozone also disappointed EUR investors, printing at a meagre 0.3% versus the expected 0.8%.

Turning to today, the single currency may face more selling pressure as German data once again missed forecasts, with industrial production printing at -4%.

US Dollar (USD) Undermined by Shifting Market Mood

The US Dollar (USD) had mixed success yesterday as a shifting market mood saw the ‘Greenback’ struggle to consolidate its gains.

The US ADP employment change beat forecasts by 140,000, signalling strong growth in the country’s labour market, but this seemed to cheer markets and subsequently dent the Dollar.

USD investors will be looking to the latest initial jobless claims data this afternoon for fresh impetus. Analysts expect claims to drop, but could they unexpectedly rise as they did the previous week?

Canadian Dollar (CAD) Softens as Oil Prices Ease off Seven-Year Highs

The Canadian Dollar (CAD) experienced some volatility yesterday, trending downwards against most of its peers overall, as oil prices slipped.

This afternoon, economists expect Canada’s Ivey PMI to fall from 66 to 64.2, which is still a strong score. Any unexpected results could trigger movement in the ‘Loonie’.

Australian Dollar (AUD) Firms as Market Mood Improves

The Australian Dollar (AUD) ticked higher overnight as an increase in risk appetite boosted the appeal of the perceived riskier ‘Aussie’.

New Zealand Dollar (NZD) Buoyed by Risk-On Sentiment

The New Zealand Dollar (NZD) also trended higher in overnight trade, with the risk-sensitive ‘Kiwi’ enjoying the bullish shift in market mood.