Pound (GBP) falters amid budget speculation
The pound (GBP) trended broadly lower yesterday as investors turned their attention to UK Chancellor Rachel Reeves’s upcoming budget.
Sterling sentiment weakened as investors speculated on how expected tax and spending cuts may impact the government’s plans to boost UK economic growth.
The BoE will publish its latest consumer credit figures this morning. However, the mid-tier UK economic release may have minimal impact on the pound, with market risk sentiment instead acting as the main catalyst of movement.
Euro (EUR) undermined by cooling German inflation
The euro (EUR) stumbled on Thursday after German inflation surprised to the downside in August. Inflation cooled from 2.3% to 1.9%, its lowest levels since March 2021.
This offset a surprisingly positive Eurozone economic sentiment reading earlier in the session.
Turning to today, the spotlight will turn to the Eurozone consumer price index. A similar, larger-than-expected drop in inflation across the bloc, may turbo-charge European Central Bank (ECB) rate cut bets this morning.
US dollar (USD) bolstered by upbeat GDP release
The US dollar rallied yesterday as USD investors welcomed the publication of the latest US GDP release.
The latest GDP estimate saw US growth revised up from 2.8% to 3% in the second quarter, with the US Bureau of Economic Analysis noting this was supported by an acceleration in consumer spending.
Coming up, this afternoon sees the publication of the latest core PCE price index. Will a rise in the Federal Reserve’s preferred indicator for inflation underpin demand for the US dollar at the end of the session?
Canadian dollar (CAD) jumps amid rebound in oil prices
The Canadian dollar (CAD) appreciated on Thursday as the commodity-linked currency was underpinned by a sharp uptick in oil prices.
The publication of Canada’s latest GDP figures could provide some support for the ‘loonie’ later this afternoon. Assuming Canadian economic growth accelerated as forecast in the second quarter.
Australian dollar (AUD) fluctuates as retail sales stall
Trade in the Australian dollar (AUD) was mixed overnight on Thursday. While a prevailing risk-on mood supported the ‘Aussie’ it also faced headwinds as Australia’s latest retail sales figures reported sales growth stalled in July.
New Zealand dollar (NZD) stumbles on RBNZ rate cut bets
The New Zealand dollar (NZD) faced resistance in overnight trade amid Reserve Bank of New Zealand (RBNZ) rate cut speculation.