Political turmoil drives currency movement
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Daily Currency Update
The number of job postings in the United States rebounded in October from a three-and-a-half-year low in September, according to the Job Openings and Labour Turnover Survey (JOLTS). Openings rose by 5 percent to 7.7 million in September, suggesting that job gains could pick up in the coming months. However, the figures remain below those of a year ago, when job openings were 1 million higher at 8.7 million. This development supports the Federal Reserve's steady and gradual approach to cutting interest rates, especially after the larger 50-basis-point cut seen in September. It likely won't be clear until Friday’s US jobs data whether predictions of a December 25-basis-point cut will increase or decrease. Pre-release, the likelihood was estimated at 70 percent.GBP/USD traded within a tight range yesterday, fluctuating between 1.2640 and 1.2695, and opens today in the middle of this range. GBP/EUR has also traded narrowly but currently sits at the higher end at 1.2070. Meanwhile, EUR/USD continues to oscillate above and below the key 1.0500 level and opens below it this morning.
Key Movers
South Korea joins France in suffering political turmoil. President Yoon Suk-Yeol declared martial law on Tuesday in an effort to counter “anti-state forces” among his political opponents. However, the move faced immediate backlash, including parliamentary rejection and public protests, leading him to revoke the measure within hours. In response, South Korean legislators demanded Yoon's impeachment, plunging the nation into its most significant political crisis in decades. Martial law involves replacing civilian governance with military rule, suspending civilian legal processes in favour of military ones, and potentially suspending standard civil liberties for its duration.This has hit Australasian currencies beyond the KRW, with the AUD and NZD losing ground. GBP/AUD broke back through 1.9700 following the news, and GBP/NZD is back above 2.1650. EUR and USD have both seen similar gains against these currencies.
Expected Ranges
- GBP/USD: 1.2620 - 1.2690 ▼
- GBP/EUR: 1.2030 - 1.2090 ▼
- GBP/AUD: 1.9580 - 1.9880 ▲
- EUR/USD: 1.0460 - 1.0540 ▼