Pound (GBP) wobbles amid UK tax hike fears
The pound (GBP) stumbled out of the gate this week amid fears that UK Chancellor Rachel Reeves would raise taxes and cut spending to plug a £22bn gap in the public finances inherited from the previous government.
However, Reeves ruled out implementing any new tax plans ahead of the autumn budget, allowing GBP to recoup some of its losses.
British economic data is absent from today’s calendar, potentially leaving the pound to trade without a clear trajectory.
Euro (EUR) weakens ahead of high-impact data
The euro (EUR) came under pressure yesterday due to its strong negative correlation with a rising US dollar (USD).
EUR investors also seemed reluctant to support the currency ahead of some key Eurozone data due out later in the week, including today’s GDP figures and tomorrow’s consumer price index.
So far this morning, the GDP figures from France and Spain have exceeded forecasts. Could this set the euro up for a rally later, if Eurozone GDP also comes in stronger than expected?
US dollar (USD) firms amid souring market mood
The US dollar rose yesterday, with the ‘greenback’ buoyed by a deterioration in global risk sentiment as tensions in the Middle East flared.
However, expectations that the Federal Reserve will still cut interest rates in September limited USD’s gains ahead of the Fed’s meeting later this week.
This afternoon, the latest US job openings figure and consumer confidence index are both due to decline. If they print as expected, USD exchange rates could struggle.
Canadian dollar (CAD) buoyed by USD strength
The Canadian dollar (CAD) rose during yesterday’s session, with the ‘loonie’ enjoying its positive trading relationship with the US dollar.
With no Canadian data due out today, oil price movements could drive the commodity-linked ‘loonie’.
Australian dollar (AUD) subdued amid uncertain mood
The Australian dollar (AUD) was muted overnight amid an uncertain risk sentiment and a mixed commodity market.
New Zealand dollar (NZD) rebounds from multi-month lows
The New Zealand dollar (NZD) climbed during last night’s session, with the ‘kiwi’ seemingly entering oversold conditions after striking multi-month lows.