Pound (GBP) weighed down by renewed BoE rate cut bets
The pound (GBP) drifted lower at the end of last week, as markets reacted belatedly to the Bank of England’s (BoE) dovish tilt following Thursday’s rate announcement.
Expectations for a December rate cut increased throughout Friday, while some analysts suggested interest rates could fall to around 3% by the middle of next year.
With no significant UK data due today, GBP traders may refocus on the UK’s fiscal outlook, where anxiety surrounding the forthcoming autumn budget could continue to pressure Sterling.
Euro (EUR) buoyed by USD softness
The euro (EUR) strengthened on Friday, with much of its momentum stemming from its inverse trading relationship with the US dollar (USD).
Also supporting the euro was Germany’s latest trade report, which revealed a far sharper rebound in exports at the close of the third quarter than economists had anticipated.
EUR data releases are limited today, which may see the single currency lacking firm direction as the new week begins.
US dollar (USD) tumbles as consumer confidence sinks
The US dollar faced heavy selling on Friday following the University of Michigan’s newest consumer sentiment survey.
November’s reading showed a steeper-than-forecast drop in confidence, which fell to its worst levels since the historic low of June 2022, as the ongoing US government shutdown continued to erode morale.
As this week begins, the US dollar is regaining ground after the US Senate narrowly approved a bill on Sunday that could help bring an end to the longest government shutdown on record.
Canadian dollar (CAD) jumps on upbeat jobs report
The Canadian dollar (CAD) ended last week on solid footing after investors welcomed an unexpected fall in domestic unemployment last month.
Looking ahead, the ‘loonie’ is likely to be influenced by movements in oil prices, with rising prices potentially extending the upside in the currency.
Australian dollar (AUD) climbs on hawkish RBA tone
The Australian dollar (AUD) kicked off the week on the front foot, rallying through Monday’s Asian trading session after Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser emphasised the need to maintain restrictive monetary settings.
New Zealand dollar (NZD) rises amid improved risk sentiment
The New Zealand dollar (NZD) also advanced in overnight trade, supported by a surprise uptick in Chinese inflation that helped boost market risk appetite.
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