Pound (GBP) volatile as markets assess jobs figures
The pound (GBP) experienced choppy trading yesterday as markets assessed the UK’s latest employment data.
While unemployment remained unchanged instead of increasing as economists had anticipated, the report also highlighted some signs of weakness beneath the surface of the British labour market.
Looking ahead to today, a modest uptick in UK inflation in August has done little to support GBP, as the increase is unlikely to encourage the Bank of England (BoE) to raise interest rates tomorrow.
Euro (EUR) subdued as German figures disappoint
The euro (EUR) likewise struggled to establish a clear direction yesterday following the release of Germany’s latest ZEW economic sentiment index.
The measure came in below expectations, weighing on EUR sentiment. Nevertheless, it still marked a fifth successive monthly improvement in September, with the index climbing to its highest level since February.
Today, forecasts for a contraction in Eurozone industrial production in July could place pressure on the common currency.
US dollar (USD) supported as markets await Fed decision
The US dollar (USD) continued to find support yesterday as a risk-averse market environment and expectations of a Federal Reserve interest rate hike helped to bolster the currency.
However, the ‘greenback’ also appeared to encounter resistance at higher levels, with USD struggling to extend its gains as markets awaited the upcoming Fed decision.
A projected rebound in US retail sales for August could provide additional support for the US dollar today. Even so, the currency’s gains could remain restrained ahead of tonight’s Fed announcement.
Canadian dollar (CAD) slips as oil prices remain volatile
The commodity-linked Canadian dollar (CAD) initially benefited yesterday from an increase in oil prices, before losing ground in the afternoon as crude markets became more unsettled.
With little in the way of Canadian economic data due today, movements in crude prices could once again prove influential for CAD exchange rates. Should oil remain above $100 per barrel, the ‘loonie’ could retain broad support.
Australian dollar (AUD) subdued despite brighter sentiment
The Australian dollar (AUD) moved largely sideways overnight as risk appetite improved, while Australia’s leading index came in below expectations.
New Zealand dollar (NZD) retreats despite upbeat data
The New Zealand dollar (NZD) slipped to fresh multi-week lows overnight despite consumer confidence exceeding forecasts in the third quarter. However, NZD subsequently recovered from its weakest levels.
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