[author: Amanda Dunn]
Pound (GBP) muted amid fiscal credibility questions
The pound (GBP) was subdued on Friday as headlines around the UK autumn budget eroded some of the optimism seen after its announcement on Wednesday.
Investors were particularly worried that markets might gradually lose faith in the government’s fiscal credibility, as much of the tightening announced is backloaded, raising concerns that it may never be fully implemented.
With UK data thin on the ground today, domestic political news and the ongoing reaction to the budget may determine the pound’s direction.
Euro (EUR) slips as Ukraine peace hopes fade
The euro (EUR) fell on Friday as Ukraine peace hopes continued to fade.
EUR was also undermined by softer-than-expected German inflation, as investors modestly adjusted their European Central Bank (ECB) policy expectations.
Aside from November’s final manufacturing PMI, Eurozone data is absent from the calendar today, potentially leaving EUR to be driven by any headlines surrounding peace talks to end the Russia-Ukraine war.
US dollar (USD) subdued amid Fed rate cut bets
The US dollar (USD) wavered at the end of last week, with the ‘greenback’ unable to mount a convincing recovery despite some dip-buying.
Increased odds of a Federal Reserve interest rate cut in December kept a firm lid on the American dollar, with the currency having suffered notable losses over the course of the week.
The latest ISM PMI is expected to show that the US manufacturing sector remained in contraction in November, which could weigh on the US dollar today.
Canadian dollar (CAD) buoyed by GDP recovery
The Canadian dollar (CAD) strengthened during Friday’s session, as better-than-forecast Canadian GDP figures lent the ‘loonie’ support.
Turning to today, Canada’s latest manufacturing PMI could impact the Canadian dollar. While factory activity is expected to have improved in November, it’s set to remain weak, which could subdue the ‘loonie’.
Australian dollar (AUD) holds steady amid mixed data
The Australian dollar (AUD) wavered overnight, despite domestic company profits unexpectedly stalling in the third quarter, as the latest monthly inflation reading exceeded forecasts.
New Zealand dollar (NZD) flat amid unsure market mood
The New Zealand dollar (NZD) also moved sideways overnight, as a lack of data and uncertain market mood kept the ‘kiwi’ rangebound.
