Pound (GBP) advance tempered by autumn budget concerns
The pound (GBP) ticked higher on Monday, drawing support from the improved mood across global markets.
However, Sterling’s gains were modest as ongoing nerves surrounding Chancellor Rachel Reeves’s forthcoming autumn budget continued to dampen GBP sentiment.
Adding to the pressure this morning is data showing UK unemployment rose to its highest level in four years in September, reinforcing expectations that the Bank of England (BoE) will cut interest rates next month.
Euro (EUR) flat amid upbeat market mood
The euro (EUR) found little support on Monday, as the relief-driven rally in markets reduced appetite for safer assets.
This shift in sentiment stemmed from optimism around the US funding bill and stronger-than-anticipated inflation data emerging from China over the weekend.
The euro could find some tailwinds later today, with the German ZEW economic sentiment index expected to show another monthly improvement in confidence.
US dollar (USD) soft despite funding bill progress
The US dollar (USD) began the week on the back foot after news that the US Senate narrowly approved a funding bill that may help bring an end to the US government shutdown.
Although the development provided initial relief for USD investors, it also drove a broader uptick in risk appetite, reducing the safe-haven appeal of the dollar.
Attention now turns to today’s weekly ADP employment data, where a weaker snapshot of the US labour market could place fresh pressure on the US dollar.
Canadian dollar (CAD) supported by firmer oil prices
The Canadian dollar (CAD) strengthened on Monday, buoyed by rising oil prices that helped lift the commodity-tied currency.
If crude prices continue their upward momentum, the ‘loonie’ may be able to extend its gains through today’s session.
Australian dollar (AUD) dips despite jump in consumer sentiment
The Australian dollar (AUD) weakened overnight on Monday as renewed demand for the US dollar overshadowed a stronger-than-forecast rise in domestic consumer confidence.
New Zealand dollar (NZD) softens as cautious mood persists
The New Zealand dollar (NZD) also edged lower in overnight trade, with the prevailing risk-off tone diminishing appetite for the ‘kiwi’.
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