Pound (GBP) supported by improving risk sentiment
The pound (GBP) edged higher yesterday as a brighter global risk mood helped lift Sterling sentiment.
That said, another contraction in UK retail sales volumes this month limited the pound’s advance, with investors wary of broader signs of consumer weakness.
With little in the way of fresh UK data today, attention is likely to turn toward Chancellor Rachel Reeves’s forthcoming budget and the measures she may unveil to address the estimated £20bn fiscal shortfall.
Euro (EUR) holds firm as German sentiment improves
The euro (EUR) traded steadily on Monday, with an upbeat German business confidence reading countering the headwinds facing the single currency amid renewed appetite for risk-sensitive assets.
Germany’s IFO business climate index surpassed expectations, pointing to an improving mood among manufacturers as a recent slide in new orders appeared to have levelled off.
If Germany’s upcoming consumer confidence report also shows a rebound in sentiment heading into November, the euro could find additional support today.
US dollar (USD) softens amid reduced safe-haven demand
The US dollar (USD) lost ground through yesterday’s session as a positive shift in market sentiment weighed on demand for the safe-haven currency.
Lingering concerns over the ongoing US government shutdown and its possible economic fallout added further pressure on USD trading.
With markets awaiting Wednesday’s key Federal Reserve policy decision, the US dollar may see subdued movement today as investors stay on the sidelines.
Canadian dollar (CAD) subdued after new tariff announcement
The Canadian dollar (CAD) came under pressure on Monday after US President Donald Trump imposed an additional 10% tariff on Canadian exports, deepening trade tensions between the two nations.
Looking ahead, CAD investors may remain cautious today as they await the Bank of Canada’s (BoC) upcoming interest rate decision, with markets largely pricing in a rate cut midweek.
Australian dollar (AUD) gains capped by investor selling
The Australian dollar (AUD) advanced during early Asian trading on Tuesday but began to pare back its gains later in the session as profit-taking set in.
New Zealand dollar (NZD) oscillates amid market corrections
The New Zealand dollar (NZD) mirrored its Australian counterpart overnight, with initial gains fading as traders locked in profits following yesterday’s rally.
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