USD gains held steady for the 5th consecutive day following the afternoons ISM manufacturing report showing the sector has continued to contract.
Stocks took a hit as investor confidence waned, dragging the GBP down alongside them. JPY was the winner of the day after Governor Ueda reiterated that the BoJ will continue to raise interest rates if the economy and prices perform in line with expectations.
*Daily move - against G10 rates at 7:30am, 04.09.24
** Indicative rates - interbank rates at 7:30am, 04.09.24
Final EU and UK PMI numbers are unlikely to cause market moves, therefore the focus is on JOLTS numbers and Bank of Canada’s interest rate announcement. Many markets are expecting a rate cut of 0.25% as GBPCAD continues to trade at its most favourable levels since April 2021.
Future guidance will be key for CAD. Any shift in the projected 1.5% rate cuts by July next year will significantly influence whether CAD’s downward trend persists, or if we see profit jumps on the pair.
The JOLTS numbers are expected to indicate a still cooling labour market caused by a decreasing demand and a reduced turnover as a result of dwindling confidence in job prospects. Based on this, we could see yesterday's moves repeat today.
It is worth reminding readers again that USD tends to have its best performing month in September.
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