Pound (GBP) slides as labour market data sparks BoE easing bets
The pound (GBP) stumbled yesterday after a disappointing UK jobs report strengthened expectations that the Bank of England (BoE) will cut interest rates next month.
Figures revealed unemployment jumped to 5% in the three months to September – the highest since May 2021 – while wage growth slowed, reinforcing the view that the BoE may move to loosen policy in December.
BoE Chief Economist Huw Pill is due to speak later today. If his tone turns more dovish in response to the jobs data, rate cut bets could apply further pressure on Sterling.
Euro (EUR) gains despite weak German sentiment data
The euro (EUR) advanced on Tuesday, managing to look past an unexpected drop in German economic sentiment for November.
Support for the single currency came mainly from its inverse relationship with a weakening US dollar (USD). EUR also drew some strength from growing belief that the European Central Bank (ECB) has finished lowering rates, even as other major central banks look set to continue easing.
So far today, stronger-than-expected German producer price data has failed to boost the euro, with upbeat market sentiment limiting demand for the safe-haven currency. Investors will now watch for two ECB speeches this morning for fresh direction.
US dollar (USD) retreats as Fed rate cut expectations rise
The US dollar slipped yesterday amid mounting speculation that the Federal Reserve could deliver an interest rate cut next month.
Fresh ADP employment figures revealed that US private employers shed an average of 11,250 jobs per week in the four weeks to 25 October, fuelling concerns about a cooling labour market and reinforcing the case for looser monetary policy.
Attention turns to a series of speeches from Fed officials today. Should policymakers strike a broadly dovish tone, the greenback may extend its losses.
Canadian dollar (CAD) mixed as oil gains offset USD weakness
The oil-sensitive Canadian dollar (CAD) traded in a mixed range yesterday, with rising crude prices providing support but its positive correlation with the US dollar limiting upside momentum.
With no key Canadian data releases due today, the ‘loonie’ is likely to continue tracking oil market movements.
Australian dollar (AUD) climbs on hawkish RBA comments
The Australian dollar (AUD) edged higher overnight after Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser suggested that policymakers were debating whether the current cash rate is restrictive enough to tame inflation – remarks that hinted at the possibility of further tightening.
New Zealand dollar (NZD) steady amid lack of local catalysts
The New Zealand dollar (NZD) remained confined to narrow ranges during the Asian session as mixed risk sentiment and a lack of domestic data kept the ‘kiwi’ directionless.
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