Pound (GBP) lifted by BoE outlook
The pound (GBP) advanced on Wednesday, supported by expectations of Bank of England (BoE) policy divergence.
With the BoE projected to keep rates elevated for longer than most of its peers, Sterling retained an edge in the eyes of investors.
However, with no major UK data releases due today, the pound may face a patchy performance through the session.
Euro (EUR) weakens despite higher inflation
The euro (EUR) slipped noticeably on Wednesday, even as Eurozone inflation accelerated from 2% to 2.2% in September.
The downturn in the single currency came as geopolitical worries resurfaced, with rising EU-Russia tensions and recent drone activity in Nordic airspace prompting Danish PM Mette Frederiksen to warn Europe faces its toughest moment since WWII.
EUR investors will now be watching the Eurozone’s unemployment data. If the jobless rate holds at record lows could lend the currency some near-term relief.
US dollar (USD) pressured by shutdown and weak data
The US dollar (USD) lost ground yesterday, weighed down by renewed concerns over the US government shutdown.
Efforts to claw back losses quickly faded after the ADP employment report revealed an unexpected fall in private sector hiring, further undermining demand for the ‘greenback’.
With fresh US releases limited due to the shutdown, the dollar could remain on the back foot, while changes in risk sentiment may dictate its direction.
Canadian dollar (CAD) retreats as oil and factory data disappoint
The Canadian dollar (CAD) tumbled to multi-week lows on Wednesday, dragged lower by sliding oil prices and a steeper-than-expected contraction in domestic manufacturing output.
Looking ahead, crude market dynamics are likely to steer CAD today. A continued fall in energy prices would likely keep the ‘loonie’ under pressure.
Australian dollar (AUD) muted after trade surplus narrows
The Australian dollar (AUD) was rangebound overnight as lacklustre trade figures offset a broadly upbeat risk tone. A sharp decline in exports pushed Australia’s trade surplus to its lowest level in more than seven years, curbing demand for the ‘Aussie’.
New Zealand dollar (NZD) gains on upbeat sentiment
The New Zealand dollar (NZD) pushed higher overnight, with improved risk appetite fuelling demand for the risk-sensitive currency.
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