Pound (GBP) flat in quiet trade
The pound (GBP) traded sideways yesterday in the absence of any notable UK economic data.
GBP investors were also reluctant to alter their positions in the currency ahead of some high-impact releases coming later in the week.
Today’s session opened with the publication of the UK’s latest jobs report. August’s figures revealed unemployment unexpectedly dropped while wage growth cooled as forecast. GBP investors appear primarily focused on the wage figures, with the pound muted this morning as they stoke Bank of England (BoE) interest rate cut bets.
Euro (EUR) subdued as ECB rate decision looms
The euro (EUR) was mostly muted on Monday, as EUR investors braced for the European Central Bank’s (ECB) impending interest rate decision.
Despite some economists suggesting there is a case for the ECB to leave its monetary policy untouched this month, most investors are expecting another 25bps rate cut.
Germany’s latest ZEW economic sentiment index is likely to act as the main catalyst for movement for the euro today. If the index shows that morale remains downbeat this month, the euro is likely to stumble.
US dollar (USD) buoyed by market caution
The US dollar (USD) got off to a positive start this week as a risk-averse market mood saw investors favour the safe-haven currency.
These risk-off flows were fuelled by weak Chinese economic data and ongoing tensions in the Middle East.
Coming up, USD investors will look to speeches by Federal Reserve officials Mary Daly and Adriana Kugler for direction today. If they appear open to further rate cuts, the US dollar may weaken.
Canadian dollar (CAD) muted as oil prices decline
The Canadian dollar (CAD) was subdued on Monday amid another softening of oil prices. Further losses were only avoided thanks to CAD’s positive correlation with the US dollar.
Canada will publish its latest consumer price index later this afternoon. September’s CPI figures are expected to report inflation crept higher last month. Will this ease Bank of Canada (BoC) rate cut bets and lift the ‘loonie’?
Australian dollar (AUD) sinks in risk-off trade
The Australian dollar (AUD) came under pressure again in overnight trade as flaring tensions in the Middle East limited market risk appetite.
New Zealand dollar (NZD) softens amid gloomy mood
The New Zealand dollar (NZD) also faltered overnight on Monday as market risk aversion limited demand for the ‘kiwi’.