Pound Sterling (GBP)
Pound traders are primed for movement following today’s budget announcement, which will be Chancellor Philip Hammond’s second of 2017.
The pressure is on to satisfy as many people as possible, but with the strain of Brexit negotiations taking a toll on the UK economic outlook, this might be easier said than done.
The government was memorably forced into an embarrassing u-turn on the first budget of 2017, following an outcry over increasing National Insurance rates for the self-employed.
If Hammond drops any more budgetary clangers today then the Pound could tumble, but if the plans are viewed positively Sterling could rise.
The Euro has advanced against most of its peers today despite the political situation in Germany remaining uncertain.
With no major data out yet today, the Euro has instead been supported by yesterday afternoon’s speech from a European Central Bank (ECB) official.
Benoit Couere, a policymaker at the ECB, stated that the ECB could separate its bond buying plans from whether inflation is currently near the 2% target region.
The Euro could rise this afternoon if the Eurozone consumer confidence flash for November improves as expected.
US Dollar (USD)
Recent comments from Fed Chair Janet Yellen haven’t done much for the US Dollar, with the currency declining against both the Euro and Pound.
Late on Tuesday, Yellen stated that the US was on track for gradual interest rate hikes.
While this was positive news, Yellen later added that unwinding the Fed’s massive QE balance sheet would take a long time.
USD traders remain wary about this afternoon’s durable goods orders reading, which is tipped to show a major slowdown in October.
If orders do slow then the US Dollar could weaken, mainly because this might be a sign of slowing economic activity.
Australian Dollar (AUD)
A surprising surge in construction sector activity hasn’t been enough to support the Australian Dollar today.
The antipodean currency has made moderate losses across the board, dropping by -0.5% against the Euro.
The construction output figure showed a rise of 15.7% in Q3 instead of the forecast -2.1% drop.
This slump may have been triggered by a negative response to recent remarks from Reserve Bank of Australia (RBA) Governor Philip Lowe.
Commenting on national wage growth, Lowe has warned that cost-cutting businesses are at least partly responsible for disappointing wage growth.
New Zealand Dollar (NZD)
The New Zealand Dollar has tumbled against the Euro, US Dollar and Pound today, after a warning that NZ could face a recession.
While the source is an opinion piece published by Forbes, it has nonetheless rattled traders who remain unsure about the leadership of new PM Jacinda Ardern.
Further NZD losses may be on the way if tonight’s retail sales stats slow as expected.
Canadian Dollar (CAD)
Disappointing wholesale sales figures on Tuesday have left the Canadian Dollar fluctuating against the Pound, Euro and US Dollar today.
Expectations had been for the September sales figures to show a rise of 0.6%, but instead they revealed a decline of -1.2%.
This afternoon will bring a low-impact budget balance reading for September. Estimates are for little change in the reading, which previously came in at -2.6bn.
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