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Weakness in Sterling and US Dollar Leave Euro Strong

Pound News: Sterling Volatile on Reaction to Government’s Alleged Brexit Plans

The Pound fluctuated widely yesterday, trending lower in the afternoon as the UK government’s alleged proposals to resolve the Irish border issue failed to impress political analysts and left Sterling weaker.

Britain’s September construction PMI is due for publication today but the spotlight will likely remain trained on Brexit developments, with investors keen to hear any news suggesting UK-EU negotiations have progressed toward a deal.

 

Euro News: Euro Takes a Breather despite Continued German Recession Jitters

Thanks partly to a flagging US Dollar, the Euro recovered some ground against a weaker Pound yesterday. This came despite a contraction in German manufacturing feeding into fears for a recession in the bloc’s powerhouse economy.

With no notable Eurozone data due for publication today, the shared currency will continue reacting to shifts in demand for rival currencies like the Pound and US Dollar.

 

US Dollar News: Unexpected US Manufacturing Contraction Limits USD Appeal

The US Dollar gained against Sterling yesterday but remained limited this afternoon following a surprise contraction in US manufacturing. ISM’s latest US manufacturing PMI worsened to 47.8 rather than improving to 50.1, deepening concerns for the US economy.

US employment change data from ADP will be published today, but the market response may be limited as investors await Friday’s influential US Non-Farm Payroll job data.

 

Canadian Dollar News: CAD Demand Limited as Canadian Growth Stagnates

Canada’s latest ecostats were mixed, as manufacturing beat forecasts in September’s PMI and July’s growth rate unexpectedly slowed to a stagnant 0.0%, increasing speculation for a Bank of Canada (BoC) rate cut.

However, rising oil prices offered the Canadian Dollar some support. If oil and trade news impresses investors today, the Canadian Dollar is likely to remain resilient.

 

Australian Dollar News: Reserve Bank of Australia’s (RBA) Dovish Shift Sends AUD Plummeting

Despite previous commentary questioning the effectiveness of monetary easing, the Reserve Bank of Australia (RBA) supplemented its rate cut by signalling further near-term easing. This surprisingly dovish shift from the central bank’s previous optimism caused the Australian Dollar to plummet yesterday.

AUD investors will now be looking ahead to major upcoming data, including tomorrow’s services and trade stats which could shed further light on the Australian economy and give investors an opportunity to speculate on future RBA policy decisions.

 

 

Upcoming Data

 

Wednesday, 2nd October

09:30    UK Construction PMI

13:15    US ADP Employment Change

 

Alastair Archbold
Currency Trader
T: 01442 892 062

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