Pound (GBP) subdued amid UK economic jitters
The pound (GBP) opened this week on the defensive amid uncertainty over the impact Donald Trump’s economic policies will have on UK growth.
Trump’s tariffs threaten to slow UK GDP in the coming years, although there are reports that the incoming president might consider a ‘preferential’ trade deal with the UK.
Today’s session kicked off with the publication of the UK’s latest employment figures. September’s data has applied fresh pressure to the pound after reporting a sharper-than-expected rise in unemployment.
Euro (EUR) undermined by tariff concerns
The euro (EUR) stumbled on Monday as ongoing fears over potential US tariffs under a Trump presidency continued to take their toll on the currency.
These losses were further compounded by German political uncertainty following the collapse of the coalition government last week.
Turning to today’s session the focus turns to Germany’s latest ZEW economic sentiment, which may apply additional pressure to the euro this morning if it reports morale deteriorated this month.
US dollar (USD) buoyed by tempered Fed rate cut bets
The US dollar (USD) strengthened through yesterday’s session as USD investors trimmed their bets for further interest rate cuts from the Federal Reserve, on the expectations that a Republican ‘red wave’ will make it easier for Trump to enact his tariffs and tax plans.
However, these gains were capped amid lighter trading volumes as US markets closed for Veterans Day.
Looking ahead, the US dollar looks set to strengthen if we get confirmation that Republicans have won the House of Representatives.
Canadian dollar (CAD) dented by sliding oil prices
The Canadian dollar (CAD) trended broadly lower on Monday as the appeal of the commodity-sensitive currency was undermined by a drop in global oil prices.
With Canadian data in short supply, expect the ‘loonie’ to remain sensitive to crude prices through today’s session.
Australian dollar (AUD) weakens despite positive confidence figures
The Australian dollar (AUD) stumbled in overnight trade as surprisingly positive domestic consumer and business confidence figures were not enough to offset market concerns over China.
New Zealand dollar (NZD) dented by risk-off flows
The New Zealand dollar (NZD) also trended lower overnight on Monday as a cautious market mood limited the appeal of the ‘kiwi’.