Pound (GBP) Undermined as Sentiment Sours
The Pound (GBP) trended higher against many of its rivals yesterday as UK Covid cases fell for the fourth consecutive day and the Confederation of British Industry’s distributive trades smashed forecasts.
However, profit-taking and a souring of market sentiment erased a large part of Sterling’s gains in the afternoon.
GBP investors will be focusing on the Chancellor’s autumn budget later today. The Pound may be quiet as we approach the budget, and volatility could follow.
Euro (EUR) Muted as German GDP Forecast Cut
The Euro (EUR) softened against many of its peers in yesterday’s session after Germany’s Economy Minister, Peter Altmaier, announced a cut in the country’s GDP forecast for this year.
Altmaier said that the government has slashed its 2021 GDP growth projection from 3.5% to 2.6%, as supply bottlenecks continue to hobble industry in Europe’s largest economy.
EUR could firm this morning, as German consumer confidence unexpectedly rose heading into November.
US Dollar (USD) Rebounds amid Rise in Consumer Confidence
The US Dollar (USD) rose and fell through the first part of yesterday’s European session as the market mood shifted, trending downwards overall by midday.
However, the safe-haven ‘Greenback’ managed to rebound in the afternoon as risk appetite waned and US consumer confidence unexpectedly rose.
US durable goods orders are in the spotlight for USD investors today. The expected 1.1% contraction in orders may dent the US Dollar.
Canadian Dollar (CAD) Wavers ahead of BoC Decision
The commodity-linked Canadian Dollar (CAD) wavered yesterday amid some volatility in the price of crude. CAD investors also seemed hesitant ahead of the Bank of Canada (BoC) interest rate decision, which is their focus for today’s session.
With inflation at an 18-year high and the Canadian labour market back to pre-pandemic levels, analysts will be watching for any signs that the BoC will take a more hawkish tack.
Australian Dollar (AUD) Surges on Strong CPI
The Australian Dollar (AUD) jumped overnight, as the trimmed mean CPI – the Reserve Bank of Australia’s (RBA) preferred measure of inflation – printed 0.3% above forecasts to hit 2.1%.
New Zealand Dollar (NZD) Buoyed by Risk-On Mood
The New Zealand Dollar (NZD) wavered overnight, edging higher against most of its rivals, as a risk-on mood was offset by a larger-than-expected drop in business confidence.