The pound is up sharply today thanks to the Bank of England’s (BoE) decision to keep interest rates steady for the rest of the year, and thanks to a UK court decision that requires parliament to hold a vote on Brexit before EU referendum plans officially begin. The central bank’s decision comes largely as the UK economy has been much more resilient than BoE Governor Carney or other analysts had predicted before June’s Brexit vote. October’s stronger-than-expected services sector activity is also giving the currency a boost, and is the last data set to come out this week.
Nearby, the euro is falling despite fair unemployment results out of Italy, Spain, and the broader region, perhaps as investors favor the pound this morning. Tomorrow we’ll see several October business activity readings from all the major Eurozone countries.
Closer to home, the US dollar is recovering some from its lows earlier today thanks to strong weekly continuing jobless claims and better-than-expected non-farm productivity growth for the third quarter. Investors are awaiting business activity reports out later this morning, which could lift the greenback if they bring positive surprises.
To the north, the Canadian dollar is rising as oil prices move up closer to $46 per barrel, and as investors wait for tonight’s speech from Bank of Canada Governor Poloz. Meanwhile, the Australian dollar is climbing as investors are also awaiting this evening’s retail sales results for September and a statement from the Reserve Bank of Australia.
The Japanese yen continues to strengthen as investors trade the US dollar with its election uncertainty for the traditional “safe-haven” currency of the East.
EURUSD: The euro is down with fair unemployment results out of the region, perhaps as investors favor the pound.
GBPUSD: The pound is up sharply after this morning’s BoE and high court decisions.
AUDUSD: The Aussie dollar is rallying as investors await retail sales results out tonight.
USDCAD: The Canadian dollar is up with higher oil prices.