Pound (GBP) slides amid concerns for UK economy
The pound (GBP) slumped yesterday as Trump’s election victory raised fears about the UK’s economic outlook.
Analysts believe that a Trump presidency could hurt UK growth while also driving up inflation, potentially prolonging the country’s cost-of-living crisis.
Looking forward, the Bank of England (BoE) interest rate decision today could drive GBP movement. With an interest rate cut fully priced in, any hints at another cut in December will likely push Sterling lower.
Euro (EUR) plunges amid USD strength
The euro (EUR) plummeted yesterday as the single currency suffered from its negative trading relationship with the soaring US dollar (USD).
In addition, fears that Donald Trump’s planned tariffs on European exports could hammer the Eurozone economy weighed heavily on EUR.
Today, the euro is managing to crawl up from its worst levels despite some downbeat German data. Could an acceleration in Eurozone retail sales growth further support EUR later this morning?
US dollar (USD) skyrockets following Trump victory
The US dollar surged yesterday as Trump’s election victory turbocharged the ‘greenback’.
Markets expect a low-tax, pro-business approach from Trump, which could boost US growth and lift inflation in the near term, potentially pushing the Federal Reserve to keep interest rates higher for longer.
The afterglow of the US election could keep USD afloat today, although movement may be limited ahead of the Fed rate decision this evening.
Canadian dollar (CAD) climbs alongside USD
The Canadian dollar (CAD) strengthened yesterday, with CAD enjoying its positive correlation with USD.
With market-moving Canadian data in short supply today, USD and oil price movement could continue to influence the ‘loonie’.
Australian dollar (AUD) firms on strong Chinese data
The Australian dollar (AUD) strengthened overnight, with AUD investors shrugging off weaker Australian trade figures and instead focusing on strong trade data from China and a risk-on market mood.
New Zealand dollar (NZD) rises amid risk-on mood
The New Zealand dollar (NZD) also marched higher last night, with the risk-sensitive ‘kiwi’ enjoying the upbeat tone in markets.