Pound (GBP) subdued as UK borrowing surges
The pound (GBP) traded unevenly yesterday, with a sharp increase in UK government borrowing in August weighing on Sterling sentiment.
However, GBP managed to avoid a decline as stronger-than-expected manufacturing data from the Confederation of British Industry (CBI), alongside falling oil prices, offered some support.
Looking ahead, GBP investors are likely to turn their attention to the UK’s preliminary services PMI for September this morning. A slowdown in activity this month could put further pressure on Sterling.
Euro (EUR) unsettled amid data vacuum
The euro (EUR) also struggled to establish a clear direction yesterday, with a lack of fresh Eurozone data leaving the currency vulnerable to external influences.
While lower oil prices eased some concerns surrounding a potential energy crunch across the Eurozone, the single currency was also hindered by its strong negative correlation with the US dollar (USD), which edged higher.
The Eurozone’s latest PMIs were also released this morning, with stronger-than-expected results potentially boosting the single currency today.
US dollar (USD) edges higher as employment growth improves
After some initial volatility, the US dollar strengthened yesterday, supported in part by fresh data indicating that US employment growth continued to improve.
USD also found support from remarks by US President Donald Trump, who threatened to ‘annihilate’ Iran if it failed to reach a deal, while suggesting that any agreement would probably come after the November midterm elections.
Although generally less influential than the ISM surveys, today’s latest S&P Global PMIs for the US could still affect the ‘greenback’. Continued robust activity could provide further support for the US dollar.
Canadian dollar (CAD) flat as oil prices fluctuate
The crude-linked Canadian dollar (CAD) remained resilient yesterday despite falling oil prices, with the ‘loonie’ largely moving sideways against many of its peers.
With oil prices extending their losses today, the Canadian dollar could face renewed pressure. Further declines in crude prices could weigh significantly on CAD.
Australian dollar (AUD) falls as European session opens
The Australian dollar (AUD) initially held broadly steady during overnight trade despite weaker PMI figures, before losing ground as the European session got underway.
New Zealand dollar (NZD) slips amid uncertain risk sentiment
The New Zealand dollar (NZD) moved lower overnight as expectations of US-Iran peace talks failed to generate a clear shift towards a risk-on market mood.
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