Pound (GBP) climbs after stronger-than-expected GDP growth
The pound (GBP) advanced on Thursday after the UK’s latest GDP figures surprised to the upside.
The economy’s return to growth in August was seen as bolstering the argument for the Bank of England (BoE) to increase interest rates at its next meeting. The figures may also offer Chancellor John Healey some additional breathing room ahead of his upcoming budget.
Looking ahead, comments from BoE Governor Andrew Bailey could weigh on the pound today, after he described the evidence of second-round inflation effects as having remained ‘quite subdued’ so far.
Euro (EUR) finds relief from weaker US dollar
The euro (EUR) recovered some ground on Thursday as weakness in the US dollar (USD) provided a reprieve from the single currency’s recent slide, reflecting their tendency to move in opposite directions.
Nevertheless, the euro’s recovery was limited, with France’s deepening debt problems continuing to undermine confidence in the currency.
Today’s session brings the release of the Eurozone’s final September inflation figures. Although the data is expected to confirm that price growth has reached a three-year high, it is unlikely to significantly alter expectations for European Central Bank (ECB) monetary policy.
US dollar (USD) retreats as AI selloff unsettles markets
The US dollar (USD) came under pressure throughout Thursday as a selloff in AI-related stocks unsettled investors and dampened demand for the ‘greenback’.
Consequently, the currency pulled back from its year-to-date highs reached on Wednesday, despite US producer prices and consumer spending both exceeding forecasts in the latest figures.
The US dollar has struggled to regain its footing this morning following overnight remarks from Federal Reserve Chair Kevin Warsh, who avoided giving a clear indication of whether interest rates would be raised this month.
Canadian dollar (CAD) slips as oil prices retreat
The Canadian dollar (CAD) struggled to gain traction on Thursday as falling global oil prices weighed on demand for the commodity-sensitive currency.
Should energy prices continue to ease, the ‘loonie’ could remain under pressure heading into the end of the week.
Australian dollar (AUD) recovery limited by weaker rate hike bets
The Australian dollar (AUD) bounced back during Friday’s Asian session as a broad improvement in risk appetite lifted demand for the currency. However, its advance was constrained after markets reduced the probability of a Reserve Bank of Australia (RBA) rate hike in November to below 20%.
New Zealand dollar (NZD) rallies on improved market sentiment
The New Zealand dollar (NZD) also advanced in overnight trade, with persistent weakness in the US dollar helping to support demand for risk-sensitive currencies.
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