Pound Firms as UK Energy Fears Ease

Pound (GBP) Edges Higher as Energy Worries Ease 

The Pound (GBP) firmed against most of its rivals yesterday as the UK government said it was confident the country would have adequate energy supplies this winter and gas prices remained calm

Also supporting Sterling were hawkish comments from the Bank of England’s (BoE) new Chief Economist, Huw Pill, who said that inflationary pressures are likely to last longer than initially thought.

With no significant UK data out today, headlines around the UK’s energy and supply chain crises could be the primary driver of GBP exchange rates. 

Euro (EUR) Dented by Drop in German Production 

The Euro (EUR) softened through yesterday’s session after German industrial production declined by 4%, much worse than the 0.4% dip that economists had expected. 

The drop in manufacturing came as rising energy costs and supply chain disruption continued to stifle factory activity, stoking fears of a bottleneck recession. 

Turning to today, more poor German data could cause headwinds for the Euro, as Germany’s trade surplus narrowed by more than economists expected in August. 

US Dollar (USD) Softens amid Upbeat Market Mood 

The US Dollar (USD) trended lower against many of its rivals yesterday as an improving market mood dented the appeal of the safe-haven currency. 

In addition, the ‘Greenback’ was under pressure as the US neared the deadline to extend the debt ceiling and avert a default. 

Today the US Senate has voted to raise the nation’s debt limit, avoiding the economically devastating effect of a default, which could relieve downward pressure on the US Dollar. 

The non-farm payrolls report this afternoon may also boost USD, as it’s expected to show that the US economy added 500,000 jobs in September. 

Canadian Dollar (CAD) Mixed despite Strong PMI 

The oil-sensitive Canadian Dollar (CAD) had a mixed session yesterday, despite rising oil prices and a better-than-expected PMI. 

Canada’s employment data this afternoon is expected to be positive, which could support the ‘Loonie’. 

Australian Dollar (AUD) Down as Market Sentiment Sours 

The risk-sensitive Australian Dollar (AUD) ticked lower overnight as renewed concerns over China’s indebted property sector sapped investors’ appetite for risk.  

New Zealand Dollar (NZD) Dips amid Risk-Off Trade 

The New Zealand Dollar (NZD) also trended lower in overnight trade, as the perceived riskier ‘Kiwi’ suffered amid a bearish market mood.