Pound (GBP) volatile as UK unveils budget
The pound (GBP) was choppy yesterday as investors reacted to the unveiling of the UK’s Autumn Budget.
Anxiety over tax hikes, higher borrowing, and unflattering long-term growth weighed on GBP, although expectations of slower Bank of England (BoE) interest rate cuts cushioned Sterling’s downside.
The budget could have a lingering impact on the pound today due to a lack of market-moving UK data. Sterling has managed so far to recoup some of yesterday’s losses.
Euro (EUR) rallies as GDP beats forecasts
The euro (EUR) strengthened during yesterday’s session as better-than-forecast Eurozone GDP boosted the single currency.
Economic growth in the bloc unexpectedly accelerated from 0.2% to 0.4% in the third quarter. This positive data saw the euro leap higher.
Looking ahead, the Eurozone’s latest consumer price index could boost EUR this morning. Analysts expect to see an uptick in inflation in October.
US dollar (USD) whipsaws amid mixed data
The US dollar (USD) was volatile yesterday as mixed US economic data saw the American currency fluctuate, with the ‘greenback’ eventually trending lower.
Stronger-than-forecast ADP payrolls figures initially boosted USD before an unexpected slowdown in US third-quarter GDP brought the US dollar back down.
The latest core PCE price index – the Federal Reserve’s preferred measure of inflation – is out this afternoon. If inflation cools as expected, USD could stumble.
Canadian dollar (CAD) wavers lower on USD correlation
The Canadian dollar (CAD) was rocked by its positive correlation with the US dollar yesterday. Strong oil prices cushioned the crude-linked currency, however.
Later today, Canada’s latest GDP figures could drive most movement. Could a recovery in growth in September see the Canadian dollar rise?
Australian dollar (AUD) subdued as retail sales slow
The Australian dollar (AUD) was muted overnight amid a mixed market mood and a sharp slowdown in Australian retail sales in September.
New Zealand dollar (NZD) muted despite improving business confidence
An unexpected rise in New Zealand business confidence only provided the New Zealand dollar (NZD) with a modest upside last night, as the improvement was due to expectations that interest rates will continue to fall.