Pound (GBP) supported by stronger PMI
The pound (GBP) clawed back some ground yesterday after the UK’s services PMI for October was revised higher, signalling stronger activity in the sector.
That said, lingering unease about the forthcoming autumn budget and caution ahead of today’s Bank of England (BoE) policy decision prevented the currency from gaining further traction.
All eyes are now on the BoE announcement. If the central bank keeps rates unchanged but signals a dovish stance, Sterling could come under pressure. A surprise rate cut would likely drive sharper losses.
Euro (EUR) steady amid mixed drivers
The euro (EUR) moved without clear direction on Wednesday, as upbeat data was offset by geopolitical concerns.
Although German factory orders jumped in September and the Eurozone’s final services PMI was revised higher, reports of drones disrupting civil and military sites in Belgium unsettled investors amid speculation of Russian involvement.
A weaker-than-forecast rebound in German industrial output this morning has curbed optimism around the single currency, while subdued Eurozone retail sales figures may add further headwinds.
US dollar (USD) softens despite upbeat data
The US dollar (USD) fluctuated near multi-month highs yesterday, as market sentiment remained cautious.
Later in the session, stronger-than-expected ADP employment and ISM services PMI figures lifted risk appetite, reducing demand for the safe-haven ‘greenback’.
With no major US releases on the calendar today, USD movement will likely hinge on shifts in risk sentiment. A deterioration in market mood could see the American dollar attract renewed support.
Canadian dollar (CAD) quiet amid lack of data
The Canadian dollar (CAD) traded narrowly on Wednesday, with mixed oil prices and a quiet domestic calendar limiting movement.
Attention now turns to Canada’s Ivey PMI, due later today. Signs of slowing business activity could add to pressure on the ‘loonie’.
Australian dollar (AUD) dips despite upbeat trade data
The Australian dollar (AUD) eased overnight, as falling commodity prices overshadowed stronger-than-expected domestic trade figures.
New Zealand dollar (NZD) weakens amid softer commodity prices
The New Zealand dollar (NZD) slipped during overnight trade, with declining commodity prices weighing on demand for the ‘kiwi’.
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