Pound (GBP) extends losses despite easing gilt yields
The pound (GBP) weakened against most of its peers yesterday, with Sterling continuing to feel the aftereffects of recent bond market turbulence despite a sharp decline in UK borrowing costs.
This pressure was compounded by the UK’s latest services PMI, as August’s finalised reading showed growth had been revised lower.
Bank of England (BoE) Governor Andrew Bailey is due to speak later this morning, with his comments potentially weighing on Sterling if they strike a cautious tone.
Euro (EUR) strengthens as Eurozone PPI surges
The euro (EUR) moved broadly higher on Thursday as the Eurozone’s latest producer price index exceeded expectations.
Alongside Tuesday’s consumer price index, the figures suggest inflationary pressures across the Eurozone are accelerating, reinforcing bets the European Central Bank (ECB) will tighten monetary policy beyond next week’s widely anticipated rate hike.
Germany’s latest industrial data could provide further support for the euro today if factory orders continued to outperform expectations in July.
US dollar (USD) slips despite strong PMI figures
The US dollar (USD) moved lower through yesterday’s session as improving market risk appetite continued to curb demand for the safe-haven currency.
The decline in USD persisted despite the latest ISM services PMI, with August’s survey showing US services activity expanded at its fastest rate in six months.
The latest US non-farm payroll report takes centre stage today, with the US dollar vulnerable to further losses if another weak reading casts doubt on a Federal Reserve rate hike this month.
Canadian dollar (CAD) supported by higher oil prices
The Canadian dollar (CAD) attracted modest support on Thursday as rising oil prices boosted the appeal of the commodity-linked currency.
Looking ahead, the ‘loonie’ could face pressure today if Canada’s latest employment figures show that job creation slowed again last month.
Australian dollar (AUD) consolidates gains amid RBA bets
The Australian dollar (AUD) reached a fresh multi-month high overnight on Thursday as the ‘Aussie’ continued to benefit from expectations of further rate hikes by the Reserve Bank of Australia (RBA).
New Zealand dollar (NZD) rallies amid positive sentiment
The New Zealand dollar (NZD) also advanced in overnight trade as a broadly upbeat market mood supported the currency.
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