Pound (GBP) steady as autumn budget digested
The pound (GBP) saw choppy trading yesterday as investors reacted to the UK’s autumn budget and the leaked Office for Budget Responsibility (OBR) growth forecasts.
Despite the volatility, Sterling managed a slight advance, with the easing of fiscal uncertainty and stronger 2025 growth projections sparking a modest relief rally.
The budget could continue to shape GBP direction today as markets assess the details. However, if traders grow concerned that high taxation might hamper the UK economy, Sterling could lose ground.
Euro (EUR) quiet despite improved sentiment
The euro (EUR) traded in a mixed fashion yesterday, with the safer single currency losing ground to riskier peers amid an upbeat market mood.
Lingering uncertainty surrounding the proposed Russia-Ukraine peace plan, along with inconsistent movement in the US dollar (USD) – which typically moves inversely to the euro – also left EUR lacking a firm trajectory.
Improved readings for German consumer confidence and Eurozone sentiment may help support the euro today. Furthermore, a hawkish tone in the European Central Bank’s (ECB) meeting minutes could give EUR an additional boost.
US dollar (USD) softens as investors embrace risk
The US dollar weakened yesterday as an optimistic market tone reduced demand for the safe-haven currency.
While a fall in initial jobless claims helped limit losses, the broader risk-on mood ultimately dragged the ‘greenback’ lower.
With no major US data due today, global risk appetite is likely to steer movement in the American dollar.
Canadian dollar (CAD) pressured by weaker oil prices
The commodity-linked Canadian dollar (CAD) experienced uneven trading yesterday, slipping against stronger rivals as oil prices remained under pressure.
Looking ahead, Canada’s latest average earnings figures will be closely watched. Any slowdown in wage growth for September could weigh on CAD further.
Australian dollar (AUD) gains on upbeat risk sentiment
The Australian dollar (AUD) advanced overnight, benefiting from the positive risk mood that lifted demand for risk-sensitive assets.
New Zealand dollar (NZD) strengthens on robust data
The New Zealand dollar (NZD) climbed overnight after stronger-than-expected retail sales for the third quarter and upbeat business confidence figures for November reinforced optimism about the country’s economic outlook.
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