Pound (GBP) dented by budget jitters
The pound (GBP) struggled to attract support during yesterday’s session amid ongoing concern over the UK’s upcoming budget.
GBP investors remain concerned by potential tax hikes in the Autumn Budget, despite it reportedly receiving the backing of the Lloyds Banking Group.
Today, GBP investors will be focused on the latest PMI results. Expect to see the pound stumble this morning if uncertainty over the UK’s upcoming budget suppressed activity in the country’s private sector this month.
Euro (EUR) undermined by USD strength
The euro (EUR) was pressured by USD strength through yesterday’s trading session.
These losses persisted throughout the day, despite European Central Bank (ECB) President Christine Lagarde suggesting that the bank needs to be cautious in regard to further interest rate cuts.
This morning also sees the publication of the latest Eurozone PMIs. October’s data is likely to weigh heavily on the euro as they are expected to report the Eurozone’s private sector contracted for the second consecutive month.
US dollar (USD) bolstered by Trump inflation expectations
The US dollar strengthened on Wednesday amid rising bets that Donald Trump will claim victory in next month’s US Presidential election.
Trump’s protectionist economic policies are expected to stoke US inflation, which is bolstering the US dollar on the expectation it will push the Federal Reserve to leave interest rates higher for longer.
This afternoon will see the publication of the latest US S&P PMIs. While not as influential as the ISM releases, they could bolster the US dollar if they report the US private sector continues to expand at a robust pace this month.
Canadian dollar (CAD) subdued following bumper BoC rate cut
The Canadian dollar (CAD) was muted on Wednesday, after the Bank of Canada (BoC) delivered a widely expected 50bps interest rate cut.
Coming up, in the absence of any notable Canadian data, movement in the ‘loonie’ may be driven by oil price dynamics today.
Australian dollar (AUD) firms as USD begins to soften
The Australian dollar (AUD) rallied in overnight trade, with the ‘Aussie’ clawing back some of yesterday’s losses as a pullback in the US dollar helped offset another lacklustre PMI print.
New Zealand dollar (NZD) buoyed by RBNZ Orr comments
The New Zealand dollar (NZD) also firmed overnight, with the ‘kiwi’ drawing strength from Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr as he suggested the bank may become more ‘circumspect’ in regard to further interest rate cuts.