Pound (GBP) wavers on disappointing PMIs
The pound (GBP) wobbled yesterday after the UK’s latest services PMI revealed a sharper-than-expected slowdown in activity this month, putting initial pressure on GBP.
Sterling found some support from an upbeat market mood, recovering against safer currencies. However, as market sentiment soured in the afternoon, GBP slipped back.
Attention now turns to a speech from Bank of England (BoE) policymaker Megan Greene later this evening. Given Greene’s reputation as one of the more hawkish members of the Monetary Policy Committee (MPC), her remarks may help underpin the pound.
Euro (EUR) pressured by geopolitical tensions
The euro (EUR) initially edged lower yesterday amid rising geopolitical concerns, after drone activity near Oslo and Copenhagen airports disrupted flights and sparked speculation over possible Russian involvement.
Mixed PMI data from the Eurozone failed to lend much support to the single currency. However, EUR clawed back some losses later in the session as a fading risk appetite bolstered the safer euro.
Looking ahead, Germany’s latest Ifo business climate index will be in focus. Forecasts point to a rise to its highest level since May 2023, which could offer fresh support to EUR exchange rates.
US dollar (USD) muted amid Fed uncertainty
The US dollar (USD) was subdued yesterday, with the safe-haven currency moving sideways as risk sentiment shifted.
Mixed remarks from Federal Reserve policymakers left USD trading in tight ranges, while the latest S&P Global PMIs from the US failed to spark much reaction.
With no notable US data releases today, USD may continue to take its cues from broader market risk trends. A downturn in sentiment could see the American dollar push higher.
Canadian dollar (CAD) soft despite rising oil prices
The Canadian dollar (CAD) struggled yesterday despite a rise in crude oil prices.
In the absence of domestic data, CAD is likely to remain driven by oil market movements and fluctuations in the US dollar. Another rise in crude could help the ‘loonie’ recover ground.
Australian dollar (AUD) rallies as inflation surprises to upside
The Australian dollar (AUD) jumped overnight after inflation figures showed price growth quickened from 2.8% to 3% in August, overshooting forecasts of 2.9%. The stronger reading dampened speculation of further interest rate cuts from the Reserve Bank of Australia (RBA).
New Zealand dollar (NZD) lifted by AUD strength
The New Zealand dollar (NZD) edged higher in tandem with its Australian counterpart, benefitting from its close correlation with the ‘Aussie’.
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