USD lost ground yesterday, after JOLTS job openings plummeted to their lowest point since early 2021.
In the meantime, GBP advanced ahead of the release of the Autumn Budget, with still very little risk premium priced in. This suggests the market is expecting a cautious budget, with limited impact.
*Daily move - against G10 rates at 7:30am, 30.10.24
** Indicative rates - interbank rates at 7:30am, 30.10.24
It's shaping up to be a busy day ahead with Q3 GDP figures out from the US and Europe, as well as German CPI numbers and ADP payrolls stateside. On the GDP numbers, recent sentiment has been for Europe's growth outlook to be pretty disappointing reflecting the recent weakness in the EUR. So, any numbers above expectations will likely cause the currency to bounce back.
In contrast, over in the US recent comments and data have supported the idea that the US economy is faring well and this has had a positive impact on USD gains this month. Should today's figures fall below expectations, we might witness investors seizing the opportunity to lock in profits from recent USD gains ahead of Friday's job numbers.
Today at lunch time we have the long anticipated release of the Autumn Budget. Like we mentioned earlier this week, should the budget deliver pro-growth policies GBP could rally. On the other hand, if policies don't inspire confidence in the market GBP could take a serious hit. However, talking to market participants, it seems many are expecting Rachel Reeves to tread carefully in her budget and thus market impact could well be limited.
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