Pound (GBP) falters despite upbeat data
The pound (GBP) trended lower against most of its peers through yesterday’s session, with GBP investors seemingly unfazed by upbeat UK economic releases.
These included data reporting only a modest increase in government borrowing in December, as well as a smaller-than-expected contraction in the UK's distributive trades index this month.
Turning to today’s session, Sterling is off to a positive start following the release of stronger-than-expected retail sales data, but could find these gains tempered later in the session if the UK’s latest PMIs disappoint.
Euro (EUR) strengthens amid tariff relief
The euro (EUR) rallied on Thursday, amid relief in Europe that US President Donald Trump scrapped plans to impose fresh tariffs on European countries amid his push to acquire Greenland.
The minutes from the European Central Bank’s (ECB) latest policy meeting also underpinned EUR as some policymakers warned of downside risks to inflation, which may encourage the bank to leave rates on hold.
The focus for EUR investors today will be on the Eurozone’s own PMIs, with the euro potentially catching bids if there are more signs of recovery in the bloc’s private sector.
US dollar (USD) slides in risk-positive trade
The US dollar (USD) remained on the defensive yesterday as positive risk flows limited demand for the safe-haven currency.
This was despite data showing that US inflation remained sticky through November and that third-quarter US GDP was revised slightly higher.
Looking ahead, the US dollar may be able to recoup some of its recent losses later today if the latest S&P PMIs report an uptick in US private sector activity this month.
Canadian dollar (CAD) subdued as oil prices soften
The Canadian dollar (CAD) was muted on Thursday as sliding oil prices reduced the appeal of the commodity-linked currency.
Canada will publish its latest retail sales data towards the end of today’s session, with the ‘loonie’ likely to strengthen if sales growth continued to accelerate in December.
Australian dollar (AUD) extends rally on impressive PMIs
The Australian dollar (AUD) maintained a positive trajectory overnight on Thursday as growth in Australia’s private sector proved far stronger than forecast this month.
New Zealand dollar (NZD) gains on inflation beat
The New Zealand dollar (NZD) also firmed in overnight trade as domestic inflation outpaced expectations in the last quarter of 2025.
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