The euro (EUR) experienced a volatile trading session yesterday, initially strengthening due to a weakening US dollar (USD), but later relinquishing gains as the USD rebounded and European Central Bank (ECB) rate hike expectations faded due to subdued inflation figures. The pound (GBP) largely traded without direction amidst a lack of UK economic data and investor caution ahead of the Bank of England's interest rate decision. Despite disappointing Chinese data, the Australian dollar (AUD) remained directionless, while an uptick in unemployment led to a decline in the New Zealand dollar (NZD).
The Canadian dollar (CAD) softened as oil prices slightly dipped. Today's manufacturing PMI is expected to further highlight the contraction in Canada's sector. The focus now shifts to today's high-impact jobs and manufacturing releases, as well as the upcoming Federal Reserve decision.
The GBP/EUR exchange rates remained steady on Tuesday, trading at around €1.1468 (EUR1 = USD1.0544). ECB Policymaker Francois Villeroy de Galhau confirmed that the cooling inflation across multiple euro zone territories justified their recent halt in rate hikes, reflecting the ECB's decision-making process.
The pound saw variable trade as investors shifted towards safer assets following reports of rockets fired by Yemen towards Israel, causing GBP to fall against these assets. However, sterling managed to gain against riskier currencies like AUD, but these gains were likely limited by UK's economic pessimism and tempered Bank of England interest rate hike expectations.
The final manufacturing index for October could impact Sterling if it confirms previous contractions. Easing cost pressures indicated in the report could negatively affect Bank of England's interest rate bets. German unemployment data, due on Thursday, is expected to show an increase from 5.7% to 5.8%, which could exert downward pressure on the common currency by negatively influencing the EU labor market.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.