Pound (GBP) Slips as Brexit Tensions Rise
The Pound (GBP) wavered yesterday, weakening overall, as Brexit concerns dented Sterling, despite expectations of a Bank of England (BoE) rate hike later this week.
Tensions between the UK and France were at an all-time high, with both sides threatening retaliatory action. Meanwhile, negotiations over the Northern Ireland (NI) protocol remain deadlocked amid signs of violence in NI.
With no data out from the UK today, Brexit headlines could continue to influence GBP exchange rates. Now that France has halted punitive action, this may relieve some pressure on the Pound.
Euro (EUR) Subdued as German Sales Unexpectedly Fall
The Euro (EUR) was subdued yesterday after German retail sales contracted by 2.5% in September, versus expectations of a 0.6% rise.
However, the single currency did manage to post gains against its weaker rivals, as a fall in the US Dollar (USD) supported EUR by way of the currencies’ negative correlation.
This morning, the finalised manufacturing PMIs for Germany and the Eurozone could dent the Euro, as they have been revised slightly lower than preliminary estimates.
US Dollar (USD) Loses Appeal amid Upbeat Market Mood
The US Dollar (USD) fell against most of its rivals yesterday, as a risk-on market mood saw investors opt for higher-yielding assets, rather than the safe-haven US Dollar.
The ‘Greenback’ was also dented by the US ISM manufacturing PMI, which revealed that production growth in American factories hit a 15-month low due to the global supply chain crisis.
Looking ahead, the latest economic optimism report for the US is expected to show a modest recovery in morale. Will this be enough to bolster the US Dollar?
Canadian Dollar (CAD) Rangebound despite Rising Oil Prices
The Canadian Dollar (CAD) had a mixed session yesterday, trading sideways against many of its peers, despite a continued recovery in oil prices and a better-than-expected manufacturing PMI.
Turning to today, a lack of market-moving Canadian data could leave the commodity-linked ‘Loonie’ to be driven by changes in the price of oil.
Australian Dollar (AUD) Slips following RBA Decision
The Australian Dollar (AUD) fell to weekly lows overnight after the Reserve Bank of Australia (RBA) left its interest rate at a record low of 0.1%.
New Zealand Dollar (NZD) Softens amid Risk-Off Mood
The risk-sensitive New Zealand Dollar (NZD) also ticked lower in overnight trade as a bearish market mood weighed on the ‘Kiwi’.