Pound (GBP) dips amid fiscal uncertainty
The pound (GBP) slipped against most of its major peers on Thursday as lingering concerns over the UK’s fiscal outlook continued to weigh on sentiment.
Markets remain cautious ahead of the government’s forthcoming budget, with investors questioning how Chancellor Rachel Reeves will balance spending pledges with the UK’s fragile public finances.
With a light domestic data calendar to close out the week, Sterling may remain directionless heading into the weekend.
Euro (EUR) pressured as German trade disappoints
The euro (EUR) lost ground yesterday after Germany’s latest trade figures revealed exports from Europe’s largest economy fell for the second consecutive month in August.
This downbeat release overshadowed optimism surrounding France’s political outlook, with reports suggesting a new Prime Minister could be appointed before the end of the week, avoiding fresh elections.
Today, EUR investors will likely focus on developments in France. Should the incoming PM be viewed as capable of restoring stability and investor confidence, the euro could find some support.
US dollar (USD) strengthens despite upbeat sentiment
The US dollar (USD) regained traction on Thursday, erasing most of the losses triggered by the Federal Reserve’s dovish September meeting minutes released the day before.
This recovery came even as risk appetite improved globally, following optimism surrounding the initial progress of the Gaza peace deal.
Attention now turns to the University of Michigan’s consumer sentiment index. If October’s data shows a further decline in confidence, USD could soften this afternoon.
Canadian dollar (CAD) lifted by BoC comments
The Canadian dollar (CAD) inched higher on Thursday, bolstered by remarks from Bank of Canada (BoC) Senior Deputy Governor Carolyn Rogers, who called for greater competition and fewer barriers in the banking industry to stimulate growth.
The focus now shifts to Canada’s latest employment report. Should September’s data confirm further cooling in the labour market, the ‘loonie’ may come under pressure.
Australian dollar (AUD) rises on RBA commentary
The Australian dollar (AUD) advanced overnight after Reserve Bank of Australia (RBA) Governor Michele Bullock commented that while overall inflation is easing, price pressures within the services sector remain persistent.
New Zealand dollar (NZD) muted after soft manufacturing data
The New Zealand dollar (NZD) traded without much direction during Friday’s Asian session as the latest Business NZ PMI pointed to another month of contraction in factory activity.
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