Daily Currency Update

USD - US Dollar

The USD is ending the week weaker, experiencing losses against all its key currency counterparts. European stocks are trading higher, recovering from significant losses in Asian markets, while US equity futures show slight gains. Bond markets are generally performing well, although US Treasuries are slightly underperforming. This trend reflects growing market belief that the Federal Reserve's tightening phase has concluded. Data on US Housing Starts and Building Permits for October will be published at 8:30 ET. The morning will also feature more commentary from Federal Reserve members Collins, Barr, Daly, and Goolsbee.

CAD - Canadian Dollar

Yesterday, the CAD experienced a notable underperformance, largely impacted by a significant drop in crude oil prices. Although oil prices haven't been a major factor for the CAD in recent weeks, a 5% fall in crude oil is hard to overlook, despite the lack of a clear fundamental reason for the decrease. This morning, WTI oil prices have slightly recovered, and the CAD is showing modest gains compared to other major currencies. There's been some narrowing in the US/Canada yield spreads since the beginning of the month, providing a slight psychological boost to the CAD, though the correlation between spreads and the CAD remains weak. Currently, the CAD’s performance is most closely linked to general risk sentiment, as indicated by correlation studies. Canada will be releasing International Securities Transactions data and Industrial Product Price figures at 8:30 ET. Observe USD/CAD trends.

EUR - Euro

Today has already been quite eventful for the Euro. It experienced losses, dropping to the low 1.08s towards the end of the Asian session, but these were promptly reversed during European trading hours. The final CPI data for the Eurozone in October verified the initial estimates, indicating a slowdown in both headline (2.9% year-over-year) and core (4.2%) inflation rates. The ECB Vice President Villeroy stated that pausing the rate hikes is 'fully justified,' while Governor Holzmann countered the idea of rapid rate reductions, suggesting that an easing of rates in the second quarter would be 'too soon'.

GBP - British Pound

UK Retail Sales declined by 0.3% last month, falling short of the anticipated 0.4% increase. The September sales figures were also adjusted downwards by 0.2 percentage points to a decrease of 1.1%. The slight weakness in October's sales could be attributed to weather factors, but it mainly highlights the challenges facing consumers and the overall subdued growth trends amidst high interest rates. The GBPUSD has seen a slight strengthening today against a generally weak USD, but its gains are the most modest among the major currencies.