Daily Currency Update

USD - US Dollar

The USD is concluding the week with a somewhat defensive stance. There has been a slight improvement in the global risk sentiment, driven by positive earnings reports after the closing of the New York markets yesterday. Modest gains have been observed in European equities and US futures, although they do not, as of now, reflect concerns regarding reports of US involvement in targeting Iranian-linked assets in Syria. However, the price of crude oil has strengthened. The robust US Q3 GDP report released yesterday could be considered a high point for the US economy in the near term. Almost all aspects of economic growth contributed to the expansion in the quarter, with notable support coming from private consumption, inventories, and government spending. It appears challenging to replicate such growth in Q4, and consensus expectations suggest that growth will decelerate to near-zero levels by year-end. Additionally, the core PCE data for the quarter came in slightly below expectations, hinting at the possibility of a minor shortfall in the monthly PCE data for September, which is due this morning.

CAD - Canadian Dollar

The CAD has seen a modest boost in overnight trading, thanks to an improved risk sentiment and stronger crude oil prices. Nonetheless, the overall sentiment surrounding the CAD remains subdued, keeping its value near the upper 1.38s, similar to the levels seen in March. Today, there are no economic reports to guide direction, leaving the CAD susceptible to external influences in the short term. Looking ahead to next week, the domestic economic calendar becomes more active with releases such as August GDP and October jobs and wages data. While the CAD appears weak, it currently sits reasonably close to the fair value estimate of 1.3769 for the morning. The potential for significant CAD improvement is limited. Observe USD/CAD trends.

EUR - Euro

The EUR is little changed this morning. Given the European Central Bank (ECB) adopting a neutral stance and ongoing weaknesses in Eurozone data, the EUR's near-term trajectory hinges on the direction of the USD. If there's a decrease in the USD core PCE data, it may offer a temporary boost to the EUR in intraday trading.

GBP - British Pound

Sterling has remained flat through the morning, with minimal movement. As there are no domestic data releases today, there is limited reason for the pound to change in value through today’s trading session. Domestic focus is turning towards the upcoming Bank of England policy decision scheduled for next Thursday. The general expectation among analysts is that the Bank will maintain the policy rate at 5.25%.