Pound (GBP) subdued in quiet session
The pound (GBP) traded unevenly yesterday, edging higher against some safe-haven currencies on the back of upbeat risk sentiment, while losing ground to higher-yielding rivals.
In addition, with no domestic data to offer direction, Sterling’s moves remained limited.
Today’s calendar is also light for UK releases, which may leave GBP vulnerable to broader market dynamics.
Euro (EUR) pressured as French PM steps down
The euro (EUR) slipped on Tuesday after French Prime Minister François Bayrou resigned, following his defeat in Monday’s parliamentary confidence vote.
The departure reignited fears over France’s political stability, dampening investor confidence in the single currency.
Looking to today, EUR could remain largely directionless as markets await tomorrow’s European Central Bank (ECB) policy announcement.
US dollar (USD) rebounds from recent lows
The US dollar (USD) started the session under pressure, sliding to multi-week lows amid improved risk appetite and lingering payrolls-related headwinds. However, dip-buying quickly allowed the ‘greenback’ to claw back recent losses.
The dollar was able to hold these gains through the afternoon, even as a revision to US non-farm payrolls showed the economy created 911,000 fewer jobs in the year to March 2025 than previously estimated.
Looking ahead, today’s US producer price index release could drive movement. Should factory gate inflation prove softer, the dollar may struggle to extend its rebound.
Canadian dollar (CAD) finds support in rising oil prices
The Canadian dollar (CAD) tracked the US dollar lower early in yesterday’s session, before a recovery in oil prices helped the commodity-linked currency regain momentum.
With Canadian economic data absent again today, CAD’s trajectory is likely to hinge on crude price dynamics. Any continued rally in oil could give the ‘loonie’ further support.
Australian dollar (AUD) strengthens on upbeat sentiment
The Australian dollar (AUD) advanced overnight, hitting multi-week highs against some counterparts, as upbeat market sentiment underpinned demand for the risk-sensitive currency.
The move was further supported by speculation that Beijing will unveil fresh economic stimulus after new figures showed Chinese consumer prices fell 0.4% in August.
New Zealand dollar (NZD) lifted by risk appetite
The New Zealand dollar (NZD) also gained during overnight trade, benefiting from the prevailing risk-on mood in global markets.
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