Pound (GBP) climbs after stronger UK GDP revision
The pound (GBP) strengthened yesterday after updated figures showed the UK economy performed better than initially estimated in the second quarter.
GDP growth was revised from 0.4% to 0.5%, leaving the UK with the strongest expansion among the G7 during the first half of the year and adding to expectations that the Bank of England (BoE) could raise rates in November.
Sterling could build on these gains today if Catherine Mann, one of the BoE’s more hawkish policymakers, uses her latest speech to signal that she favours an earlier move towards tighter monetary policy.
Euro (EUR) fluctuates amid mixed German figures
The euro (EUR) traded unevenly on Wednesday as investors digested a mixed batch of economic data from Germany.
A weaker-than-anticipated retail sales reading limited the support the single currency might otherwise have received from September’s stronger-than-expected German inflation figures.
Later today, ECB President Christine Lagarde is due to speak, with a continuation of the dovish stance seen earlier this week potentially weighing further on the euro.
US dollar (USD) retreats as Fed expectations turn dovish
The US dollar (USD) came under significant pressure yesterday as markets scaled back expectations for further Federal Reserve interest rate increases.
Expectations for an October hike dropped to roughly 37%, down from around 70% earlier in the week, after the Fed’s preferred inflation gauge came in below forecasts in August.
The ‘greenback’ has already begun to recover this morning, with the latest ISM manufacturing PMI potentially providing another boost if it confirms that US factory activity strengthened further last month.
Canadian dollar (CAD) pressured as crude remains subdued
The commodity-sensitive Canadian dollar (CAD) lacked momentum on Wednesday as oil prices remained below the $100-per-barrel threshold.
Crude market movements are likely to remain the main driver for the ‘loonie’ today, with another decline in Brent potentially dragging the currency lower.
Australian dollar (AUD) steadies as exports bounce
The Australian dollar (AUD) found some stability overnight after fresh trade figures showed exports rebounded sharply in August.
New Zealand dollar (NZD) slips amid cautious market mood
The New Zealand dollar (NZD) edged lower during Thursday’s Asian session as a more cautious tone across financial markets reduced appetite for the risk-sensitive ‘kiwi’.
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