Pound (GBP) retreats as Autumn Budget approaches
The pound (GBP) lost ground against its stronger counterparts yesterday as currency markets remained cautious ahead of the Autumn Budget.
Adding to the pressure, a new report showed that the number of UK businesses experiencing ‘significant’ financial distress reached a record high in the third quarter of 2026, fuelling concerns about the state of the UK economy.
With the government set to unveil its budget today, Sterling could experience increased volatility as markets assess the proposed fiscal measures. Should the announcements receive a favourable response from markets, the pound could make modest gains overall.
Euro (EUR) weakens amid persistent French concerns
The euro (EUR) edged lower on Tuesday as ongoing political uncertainty and fiscal concerns in France, the Eurozone’s second-largest economy, continued to weigh on market sentiment.
At the same time, a quiet Eurozone economic calendar offered little support to the single currency.
A slight decline in German consumer confidence could put further pressure on the euro today, although trading may remain subdued ahead of tomorrow’s European Central Bank (ECB) interest rate decision.
US dollar (USD) edges higher despite improving sentiment
The safe-haven US dollar (USD) strengthened yesterday, attracting demand despite a more positive market mood.
The currency’s advance came as AI stocks stabilised and US durable goods orders exceeded expectations in September.
Looking ahead, the US dollar may trade within a narrow range today as markets await tonight’s Federal Reserve interest rate decision. Although the Fed is widely expected to keep rates unchanged, hawkish signals about the future policy outlook could provide a boost to USD.
Canadian dollar (CAD) slips as oil prices retreat
The crude-linked Canadian dollar (CAD) weakened against its stronger peers yesterday as global oil prices declined, although the currency managed to hold up against some of its other counterparts.
Turning to today, the Bank of Canada (BoC) is expected to deliver a 25-basis-point interest rate hike, which could offer support to CAD.
Australian dollar (AUD) strengthens as inflation remains elevated
The Australian dollar (AUD) advanced overnight following the release of the latest Australian inflation figures, which coincided with Reserve Bank of Australia (RBA) policymakers giving evidence at a Senate hearing. During the proceedings, RBA Deputy Governor Andrew Hauser described the inflation figures as ‘too high’.
New Zealand dollar (NZD) plunges after surprise RBNZ decision
The New Zealand dollar (NZD) tumbled overnight after the Reserve Bank of New Zealand (RBNZ) surprised markets by leaving interest rates unchanged.
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