Pound (GBP) stumbles amid UK tax rise fears
The pound (GBP) fell yesterday as a rise in UK government borrowing fuelled worries about the upcoming Autumn Budget.
Public sector borrowing swelled in the year to September, exceeding the Office for Budget Responsibility’s (OBR) forecast for the period. With the Treasury under strain and tax rises expected in the upcoming budget, many investors avoided the pound.
Turning to today, GBP may be muted amid a lack of UK economic data.
Euro (EUR) softens in absence of data
The euro (EUR) was subdued yesterday, falling against its stronger rivals, amid a lack of new Eurozone data.
Additionally, EUR’s negative correlation with the US dollar (USD) pressured the euro during the afternoon.
European Central Bank (ECB) President Christine Lagarde is due to speak later this afternoon. Could dovish comments undermine the common currency?
US dollar (USD) slips amid risk-on mood
The US dollar initially fell yesterday as an increasing appetite for risk dampened demand for the safe-haven ‘greenback’.
However, sentiment soured as the session progressed, helping the US dollar avoid further losses and even strengthen against its softer rivals.
Later today, Federal Reserve policymaker Michelle Bowman is due to deliver a speech. As Bowman is one of the most hawkish rate-setters on the Fed’s board, her comments could boost USD.
Canadian dollar (CAD) underpinned by oil price uptick
The crude-linked Canadian dollar (CAD) inched higher against its weaker rivals yesterday thanks to an uptick in oil prices.
The Bank of Canada’s (BoC) upcoming interest rate decision is the focus for CAD investors today. An expected 50bps rate cut could see the ‘loonie’ slump.
Australian dollar (AUD) slips as market sentiment sours
The Australian dollar (AUD) ticked lower last night as a deteriorating market mood weighed on the risk-sensitive ‘Aussie’.
New Zealand dollar (NZD) falls amid risk aversion
Likewise, the shift to risk-averse trade dragged the New Zealand dollar (NZD) lower last night.