Pound (GBP) steadies as bond yields slide
After Tuesday’s bond-driven losses, the pound (GBP) managed to find support yesterday as long-term UK gilt yields retreated from their highest levels in nearly three decades.
Sterling also drew strength from the UK’s latest services PMI, with August’s final reading revised up to its strongest level in 16 months.
With no major UK data due today, the pound is likely to remain sensitive to movements in the bond market.
Euro (EUR) subdued amid contrasting data
The euro (EUR) traded without clear direction on Wednesday following a mixed set of economic releases from the Eurozone.
Although services sector activity in August was revised lower than earlier estimates, producer price inflation came in stronger than markets had anticipated.
Looking to today, the bloc’s retail sales figures could weigh on the euro, with forecasts pointing to a 0.2% decline in July sales.
US dollar (USD) weakens as labour market concerns deepen
The US dollar (USD) slipped through Wednesday’s session as another decline in job openings added to worries about a cooling US labour market and its impact on Federal Reserve policy.
This extended earlier losses as improving risk appetite diminished demand for the safe-haven currency.
Attention will now turn to the ADP employment report. Should August’s release add to evidence of a softening job market, the US dollar may remain on the defensive.
Canadian dollar (CAD) weighed down by falling oil prices
The Canadian dollar (CAD) retreated yesterday, with the commodity-linked currency tracking losses in global oil markets.
With little domestic data scheduled, the ‘loonie’ is likely to continue shadowing oil price movements today, leaving it vulnerable if the downtrend persists.
Australian dollar (AUD) retreats despite stronger trade balance
The Australian dollar (AUD) slipped overnight on Wednesday, with risk aversion overshadowing news of a larger-than-expected increase in Australia’s July trade surplus.
New Zealand dollar (NZD) drags lower on risk aversion
The New Zealand dollar (NZD) also lost ground overnight, with fading risk appetite limiting demand for the risk-sensitive ‘kiwi’.
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