Pound (GBP) wavers as budget reaction continues
The pound (GBP) lost momentum yesterday, with GBP wobbling after briefly touching a four-week peak in the immediate aftermath of Wednesday’s budget.
With the dust still settling, markets appeared to be weighing the government’s fiscal strategy, particularly concerns that Chancellor Rachel Reeves’s tax increases are heavily back-loaded. Speculation over a potential Bank of England (BoE) interest rate cut in December also tempered GBP appetite.
A quiet UK data calendar today means Sterling could remain sensitive to further scrutiny of the budget and its longer-term implications as we head into the weekend.
Euro (EUR) supported by cautious ECB minutes
The euro (EUR) enjoyed mild tailwinds on Thursday after the European Central Bank’s (ECB) October meeting minutes reiterated that policymakers were unanimously in favour of keeping interest rates unchanged.
This helped counterbalance underwhelming German consumer sentiment figures, which pointed to only a slight improvement as December approaches.
Looking to today, a series of German releases will draw attention, with the preliminary November CPI report likely to hold the greatest influence. An uptick in inflation could give EUR another lift.
US dollar (USD) subdued amid holiday lull
The US dollar (USD) continued to drift lower yesterday, with Thanksgiving-thinned trading reducing volatility in the currency.
Fresh expectations that the Federal Reserve may opt for a rate cut in December further limited USD demand.
US markets reopen today, but with the American data docket sparse, movement in the US dollar may remain fairly muted.
Canadian dollar (CAD) unmoved as crude prices stall
The Canadian dollar (CAD) struggled to find direction on Thursday, with the commodity-linked currency left rudderless as oil prices paused after recent swings.
Attention now turns to Canada’s third-quarter GDP results. A stronger growth reading could give the ‘loonie’ a final boost before the weekly close.
Australian dollar (AUD) lacking direction in shifting sentiment
The Australian dollar (AUD) traded without conviction overnight, with a mixed risk tone and the absence of domestic data leaving AUD lacking a firm trajectory.
New Zealand dollar (NZD) dips as investors lock in gains
The New Zealand dollar (NZD) edged lower overnight, slipping back from recent highs as traders opted to secure profits after a strong run, despite a better-than-expected consumer confidence reading.
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