Pound (GBP) Slips on Autumn Budget and Brexit Concerns
The Pound (GBP) lost ground yesterday, despite a fairly upbeat forecast from the Office for Budget Responsibility, as markets digested the UK’s autumn budget.
Rishi Sunak unveiled an extra £150bn in government spending but faced criticism that the tax burden would fall on UK households at a time when living costs are soaring.
Renewed Brexit tension may have also undermined the Pound, after Boris Johnson said that the conditions for triggering article 16 had been met.
Today, GBP investors will be focused on analysts’ interpretations of the autumn budget. Favourable analyses could boost the Pound, while warnings from economists might see Sterling fall further.
Euro (EUR) Mixed as Markets Digest Consumer Confidence Report
The Euro (EUR) had a mixed day yesterday, initially climbing after German consumer confidence unexpectedly increased to its highest level since April 2020.
However, the gauge was pushed higher by an increased propensity to buy, which in turn was due to expectations of further price rises in the coming months. As such, EUR lost some of its gains in the afternoon.
Looking ahead, the Euro faces a number of economic data releases as well as the European Central Bank’s (ECB) interest rate decision. With no policy changes expected from the bank, EUR could slip.
US Dollar (USD) Relinquishes Gains amid Mixed Market Sentiment
The US Dollar (USD) experienced some volatility yesterday, spiking at the session’s open but losing its gains in the afternoon.
The fluctuations came amid a shifting market mood and a drop in US durable goods orders, although orders contracted by less than economists had expected.
Coming up, the US quarter-on-quarter GDP growth rate is expected to slow from 6.7% to 2.7%, while jobless claims are forecast to hold at 290,000. Are USD investors in for any surprises?
Canadian Dollar (CAD) Surges as BoC Ends Quantitative Easing
The Canadian Dollar (CAD) soared yesterday, after the Bank of Canada (BoC) decided to end quantitative easing, rather than reducing it as markets had expected.
With no significant Canadian data out today, oil prices could be the main influence on CAD exchange rates.
Australian Dollar (AUD) Rebounds on RBA Rate Hike Bets
The Australian Dollar (AUD) dipped at the start of the overnight session but regained lost ground this morning as bets for an early rate hike from the Reserve Bank of Australia (RBA) supported the ‘Aussie’.
New Zealand Dollar (NZD) Climbs as Market Mood Improves
The New Zealand Dollar (NZD) also initially slipped overnight, but made significant gains as an increased appetite for risk boosted the riskier ‘Kiwi’.