Pound (GBP) slips amid growing budget uncertainty
The pound (GBP) edged lower against most major currencies on Monday as investors grew increasingly cautious ahead of Chancellor John Healey’s first Autumn Budget.
Although Healey has recently stressed his intention to support businesses, uncertainty persists over which tax measures he may introduce to plug the gap in the public finances when he unveils his plans on Wednesday.
This lingering uncertainty could continue to weigh on demand for the pound throughout today’s session.
Euro (EUR) supported by stronger German business confidence
The euro (EUR) traded steadily on Monday after Germany’s latest IFO business climate index exceeded expectations in October, climbing to its highest level since May 2023.
The upbeat reading helped offset concerns surrounding France’s mounting debt burden and persistent civil unrest in the Eurozone’s second-largest economy.
Looking ahead, the single currency may struggle to establish a clear direction today, with few significant economic releases due and investors taking a cautious approach ahead of the European Central Bank’s (ECB) interest rate decision later this week.
US dollar (USD) climbs on safe-haven demand
The US dollar (USD) strengthened at the start of the week as growing caution across financial markets encouraged investors to seek the relative safety of the ‘greenback’.
However, the currency’s advance was limited by continued selling across the AI sector, with technology stocks coming under renewed pressure following comments from Elon Musk about data centre funding.
Later today, the latest US durable goods orders figures could provide further support for the dollar if they confirm that demand rebounded in September, as forecast.
Canadian dollar (CAD) pressured by retreating oil prices
The Canadian dollar (CAD) came under pressure on Monday as Brent crude prices eased from the multi-month highs reached towards the end of last week.
Further declines in oil prices could weigh on the ‘loonie’ today, although losses may be limited by expectations that the Bank of Canada (BoC) will deliver an interest rate hike on Wednesday.
Australian dollar (AUD) subdued amid cautious sentiment
The Australian dollar (AUD) struggled to make headway in overnight trade on Monday as a more cautious mood across financial markets dampened appetite for risk-sensitive currencies.
New Zealand dollar (NZD) advances ahead of RBNZ decision
The New Zealand dollar (NZD) moved higher overnight as investors positioned themselves ahead of Wednesday’s widely anticipated interest rate hike from the Reserve Bank of New Zealand (RBNZ).
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