Pound Rally Gathers Pace as UK Markets Stabilise – Daily Update – TorFX News

The Pound (GBP) continued its rally yesterday as markets remain upbeat about Rishi Sunak’s appointment as UK Prime Minister.
News that the Treasury would delay its Halloween fiscal statement by over two weeks didn’t deter GBP bulls. Markets seem confident that Sunak and Chancellor Jeremy Hunt are taking a conscientious, considered approach to fiscal policy.
Turning to today, the Confederation of British Industry’s (CBI) latest distributive trades data is forecast to show further signs of decline in the UK economy. Could economic gloom take the shine off Sterling?
The Euro (EUR) had mixed success yesterday, strengthening against its weaker peers and recouping losses elsewhere.
The single currency’s negative correlation with the US Dollar (USD) kept EUR afloat. However, a lack of Eurozone data meant movement was fairly limited.
Looking ahead, the European Central Bank (ECB) interest rate decision is in the spotlight today. Another 75bps hike is on the cards, which could boost the Euro. Additionally, any hints at further large rate rises could also act as a tailwind.
The US Dollar extended its recent downside yesterday as traders continued to price in less aggressive action from the Federal Reserve.
The activity comes following poor US data and reports that the Fed wants to slow the pace of policy tightening. US Treasury yields, which often indicate rate rise bets, have been in decline since Friday.
Today, however, markets predict some positive US data. Could expected recoveries in durable goods orders and GDP growth see a turnaround in Fed policy expectations?
The Canadian Dollar (CAD) slumped yesterday, hitting multi-month lows against some of its rivals, after the Bank of Canada (BoC) raised interest rates by 50bps, rather than the expected 75bps.
CAD could remain subdued today as the BoC decision continues to weigh on the currency. Meanwhile, oil prices may affect the commodity-linked ‘Loonie’.
The Australian Dollar (AUD) fluctuated in overnight trade but held near monthly highs against its safer peers amid risk-positive trade.
The New Zealand Dollar (NZD) rose overnight as a bullish market mood boosted the risk-sensitive ‘Kiwi’.

Contact Samuel Birnie
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