Pound (GBP) subdued amid absence of data
The pound (GBP) was largely directionless on Tuesday, as a lack of UK economic data left investors without a clear catalyst.
That said, the risk-sensitive currency avoided heavier losses thanks to a generally upbeat market mood.
Sterling may face renewed pressure today following the latest UK public finance figures. Government borrowing rose to £20.2bn in September – the highest for that month since 2020 – which could stoke fiscal concerns ahead of the upcoming autumn budget.
Euro (EUR) steady after German producer price data
The euro (EUR) was similarly quiet yesterday, with investors digesting Germany’s latest producer price index release.
Factory gate prices dropped 1.7% in September, easing less than the forecast 1.9% decline and marking a slower pace of deflation than August’s 2.2% fall.
Attention now turns to a speech from European Central Bank (ECB) President Christine Lagarde. Any hawkish remarks could lend the single currency some support.
US dollar (USD) supported by easing trade tensions
The US dollar (USD) posted modest gains on Tuesday as optimism over a potential improvement in US-China relations bolstered demand for the currency.
Reports suggesting Washington and Beijing are looking to negotiate a truce following last week’s tariff threats provided tailwinds for the ‘greenback’.
With little in the way of fresh US data today, USD movement is likely to hinge on global risk appetite and comments from Federal Reserve official Christopher Waller.
Canadian dollar (CAD) mixed amid oil price and USD movements
The Canadian dollar (CAD) fluctuated through yesterday’s session as falling oil prices and a stronger US dollar exerted opposing pressures on the commodity-linked currency.
Looking ahead, Canada’s latest consumer price index will be the main focus. Forecasts point to a rise in inflation during September, which could lift CAD by tempering expectations of a near-term Bank of Canada (BoC) rate cut.
Australian dollar (AUD) slips in absence of new data
After strengthening during European trade, the Australian dollar (AUD) pared its gains overnight as a lack of domestic data left it exposed to external factors.
New Zealand dollar (NZD) weakens as trade gap widens
The New Zealand dollar (NZD) also lost ground overnight, retreating from recent highs after data revealed a widening trade deficit in September, which weighed on the ‘kiwi’.
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