Pound (GBP) drifts amid data void
The pound (GBP) traded without a clear direction yesterday as a lack of UK economic releases left Sterling struggling for momentum.
While concerns surrounding the upcoming autumn budget weighed on the currency, expectations that the Bank of England (BoE) will hold interest rates steady at this week’s meeting helped to limit losses.
With another quiet day ahead on the UK data front, GBP could remain subdued as investors await the BoE’s policy decision later in the week.
Euro (EUR) steady as PMI data meets projections
The euro (EUR) also traded flat on Monday as subdued sentiment dominated European markets.
The Eurozone’s final manufacturing PMI for October matched preliminary readings, confirming that factory activity was stagnant across the bloc.
Looking ahead, a speech from European Central Bank (ECB) President Christine Lagarde could provide some direction. Should Lagarde strike a hawkish tone, the euro may find support.
US dollar (USD) supported by lingering Fed momentum
The US dollar (USD) firmed yesterday, benefiting from the residual effects from last week’s Federal Reserve decision, which prompted investors to scale back expectations for further rate cuts in 2025.
However, the ‘greenback’ faced some late-session headwinds after the ISM manufacturing PMI came in below forecasts, showing a deeper-than-expected contraction in US factory activity last month.
Later today, comments from Federal Reserve policymaker Michelle Bowman could influence USD movement. As one of the more dovish voices at the Fed, Bowman’s comments may drag on the currency.
Canadian dollar (CAD) slips as oil prices retreat
The commodity-linked Canadian dollar (CAD) weakened yesterday, tracking losses in crude oil prices.
If oil prices continue to trend lower today, the ‘loonie’ may remain under pressure.
Australian dollar (AUD) weakens despite RBA hold
The Australian dollar (AUD) fell overnight as a risk-averse mood overshadowed the Reserve Bank of Australia’s (RBA) decision to leave interest rates unchanged while signalling that further cuts are unlikely in the near term.
New Zealand dollar (NZD) falls amid risk-off sentiment
The New Zealand dollar (NZD) also declined overnight as deteriorating market sentiment reduced demand for the risk-sensitive ‘kiwi’.
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