Pound (GBP) Retreats as Autumn Statement Disappoints
After initially ticking higher yesterday, the Pound (GBP) then stumbled as measures designed to ‘turbo-charge growth’ in the UK Autumn Statement seemed to fall short of expectations.
Meanwhile, the Office for Budget Responsibility’s (OBR) accompanying report was rather downbeat. The OBR now forecasts higher unemployment and slower growth than it did back in March.
Looking forward, the UK’s preliminary PMI surveys for November are out this morning. Another dire reading could see Sterling slide.
Euro (EUR) Stifled by Financial Stability Risks
The Euro (EUR) initially struggled during yesterday’s session after the European Central Bank (ECB) warned that weak growth and higher interest rates are a risk to financial stability.
However, EUR was able to regain ground against its weaker peers later on, despite its negative correlation with a rising US Dollar (USD).
The Eurozone’s PMI results are also due out today. Fresh evidence that the bloc’s economy remains weak could weigh heavily on EUR.
US Dollar (USD) Rises as Jobless Claims Drop
The US Dollar rallied yesterday in response to the latest US jobless claims figure, which dropped far more than forecast.
A 24,000 fall in new unemployment benefit claims indicated that the US labour market remains tight. This in turn dispelled recent speculation around Federal Reserve interest rate cuts.
With US data in short supply today, risk appetite could drive most movement in the safe-haven ‘Greenback’.
Canadian Dollar (CAD) Mixed as Oil Slips and USD Climbs
The crude-linked Canadian Dollar (CAD) traded without a clear direction yesterday, as a drop in oil prices was offset by the strength of the US Dollar, as CAD is positively correlated with USD.
Oil price dynamics may continue to drive CAD exchange rates today in the absence of any market-moving Canadian data.
Australian Dollar (AUD) Climbs despite Downbeat PMIs
The Australian Dollar (AUD) rose overnight, despite gloomy PMI data, as an upbeat market mood boosted the risk-sensitive ‘Aussie’.
New Zealand Dollar (NZD) Strengthens amid Risk-On Trade
The New Zealand Dollar (NZD) also climbed last night, with the risk-sensitive ‘Kiwi’ attracting support amid the optimistic mood.