Pound Plunges amid Signs of Cooling UK Labour Market

Pound (GBP) Slumps following UK Jobs Data

The Pound (GBP) tumbled yesterday after the UK’s latest employment data dented Bank of England (BoE) interest rate hike bets.

With wage growth slowing and signs of slack in the UK labour market, investors reined in their expectations for more policy tightening from the British central bank.

This morning, the UK’s consumer price index beat forecasts, with headline inflation holding steady and the core figure cooling less than expected. Could this support the Pound through today’s session?

Euro (EUR) Buoyed by Positive German Data

The Euro (EUR) enjoyed success yesterday as stronger-than-expected German data boosted the single currency.

The latest ZEW economic sentiment index showed that investor morale in the Eurozone’s largest economy improved more than forecast this month, with the score hitting its highest level since April.

Today, European Central Bank (ECB) rate hike expectations could drive EUR. If the Eurozone’s final CPI confirms a sharp cooldown in inflation, the Euro could stumble. Comments from ECB President Christine Lagarde could also drive movement.

US Dollar (USD) Wavers despite Strong Retail Sales

The US Dollar (USD) faced some choppy trade yesterday, despite stronger-than-forecast US retail sales boosting Federal Reserve rate hike bets.

USD exchange rates were undermined by weaker earnings in the US banking sector as well as new restrictions on US firms exporting AI chips to China.

Looking ahead to this evening, a number of Fed officials are due to speak. If the policymakers stoke recent speculation that US interest rates have peaked, we could see USD stumble.

Canadian Dollar (CAD) Slides as Inflation Cools

The Canadian Dollar (CAD) fell yesterday after Canada’s latest CPI showed inflation unexpectedly cooling in September, thereby denting Bank of Canada (BoC) rate expectations.

With Canadian data in short supply today, oil price dynamics could drive the commodity-linked currency.

Australian Dollar (AUD) Firms following Hawkish RBA Comments

The Australian Dollar (AUD) strengthened overnight after Reserve Bank of Australia (RBA) Governor Michele Bullock reiterated that the bank would raise interest rates again if inflation proved stubborn.

New Zealand Dollar (NZD) Buoyed by AUD Correlation

The New Zealand Dollar (NZD) rose in tandem with the ‘Aussie’ last night, thanks to the positive trading relationship between the two currencies.

Samuel Birnie

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