Pound (GBP) Rallies amid Kwarteng U-turn
The Pound (GBP) trended broadly higher at the start of this week. Supported by Chancellor Kwasi Kwarteng’s U-turn on plans for high-income tax cuts.
The news helped to bring some relief to UK bond markets, despite some analysts warning that investors will want to see Kwarteng reverse more of his fiscal policies.
With UK data thin on the ground today, the focus is likely to remain on UK fiscal policy. News that Kwarteng will bring forward his tax cutting plan could help to extend the Pound’s gains.
Euro (EUR) Undermined by Ukraine Concerns
The Euro (EUR) faltered on Monday, the single currency struggling to find support amid fresh concerns over the war in Ukraine.
Adding to the pressure on the single currency yesterday was the publication of the Eurozone’s latest Manufacturing PMI. After September’s finalised index was revised slightly lower.
Coming up, the spotlight today is likely to be on a speech by European Central Bank (ECB) President Christine Lagarde. Could some hawkish comments in light of last’s record Eurozone inflation print push the Euro higher?
US Dollar (USD) Mixed amid Fluctuating Risk Appetite
The US Dollar (USD) got off to a poor start yesterday, with a prevailing risk-on mood sapping demand for the safe-haven currency.
Attempts by the ‘Greenback’ to rally later in the session was then cut short after the publication of the ISM manufacturing PMI. The index revealed activity in the US factory slowed to a crawl last month.
Coming up, the latest US Job Openings and Labor Turnover survey (JOLTs) could dent the ‘Greenback’ this afternoon if new job opening plummeted in August as forecast.
Canadian Dollar (CAD) Strengthens as Oil Prices Jump
The Canadian Dollar (CAD) rallied on Monday. The commodity-linked currency being underpinned by a strong uptick in oil prices, amid reports OPEC is mulling another production cut.
Assuming this uptrend in oil prices persists, the ‘Loonie’ could enjoy additional support today.
Australian Dollar (AUD) Rocked by Smaller-Than-Expected RBA Rate HIke
The Australian Dollar (AUD) initially slumped in overnight trade after the Reserve Bank of Australia (RBA) only raise interest rates by 25bps, versus forecasts for an 50bps increase.
However, the ‘Aussie’ was able to recoup a good portion of its RBA inspired losses through the second half of the Asian trading session amid an improving market risk appetite.
New Zealand Dollar (NZD) Rallies in Risk-On Trade
The New Zealand Dollar (NZD) spiked overnight on Monday. A strong uptick in market sentiment helping to underpin the risk-sensitive ‘Kiwi’.