Pound (GBP) flat despite stronger GDP
The pound (GBP) traded without much conviction on Tuesday, with markets shrugging off an upward revision to the UK’s year-on-year GDP growth in the second quarter.
Concerns about looming tax hikes in the government’s autumn budget continued to weigh on sentiment, limiting any upside for Sterling.
With little in the way of UK data due today, GBP may struggle to find a decisive direction.
Euro (EUR) unsettled despite stronger German inflation
The euro (EUR) fluctuated yesterday, with its strong negative correlation to the shifting US dollar (USD) leaving the single currency directionless.
A sharper-than-expected rise in German inflation for September failed to provide lasting support.
Looking ahead, the Eurozone’s consumer price index will be the main focus. An uptick in inflation could underpin EUR if it convinces investors the European Central Bank (ECB) has reached the end of its interest rate cutting cycle.
US dollar (USD) pressured as US government closes
The US dollar edged lower on Tuesday amid a change in risk appetite and uneven data, as US job openings unexpectedly rose in August but consumer confidence fell more than forecast in September.
Overnight, the Republican funding bill failed to pass without Democrat support, forcing a government shutdown that weighed further on the ‘greenback’.
Today, traders will be watching the ADP employment report and ISM manufacturing PMI. If both readings disappoint, USD could extend its decline.
Canadian dollar (CAD) slips as oil weakens
The commodity-linked Canadian dollar (CAD) eased against several peers yesterday, dragged lower by falling oil prices.
Later today, the latest Canadian manufacturing PMI will be released. If factory activity remains in contraction in September, CAD could face additional pressure.
Australian dollar (AUD) weighed down by economic concerns
The Australian dollar (AUD) fell overnight as the Ai Group industry index dropped more than expected, while sentiment was further dampened by news that China has paused iron ore imports from mining giant BHP.
New Zealand dollar (NZD) steadies on risk appetite
The New Zealand dollar (NZD) initially tracked the ‘Aussie’ lower overnight but later staged a recovery as market risk appetite held firm.
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