Pound (GBP) struggles despite positive retail sales print
The pound (GBP) initially stumbled at the end of last week, as GBP investors shrugged off a surprise rebound in UK retail sales in August.
However, Sterling managed to find its footing in the afternoon and claw back losses against some of its peers.
Looking ahead, the pound may struggle for direction at the start of this week as notable UK economic data is thin on the ground.
Euro (EUR) unfazed by ECB Lagarde comments
The euro (EUR) was muted on Friday as markets absorbed the latest comments by European Central Bank (ECB) President Christine Lagarde.
Lagarde suggested the bank has yet to see any second-round effects from inflation and reiterated that policymakers will set rates on a meeting-by-meeting basis.
The euro opens this week on the defensive as ‘disastrous’ results for Germany’s CDU government in two local elections over the weekend raise fresh questions about Friedrich Merz's future as Chancellor.
US dollar (USD) bolstered by plunge in the yen
The US dollar (USD) outperformed most of its peers on Friday as the currency was the primary beneficiary of the weakness in the Japanese yen (JPY).
These gains were underpinned further by market caution, following suggestions from US President Donald Trump that the US could resume its strikes on Iran.
Turning to the start of this week, the US dollar may continue to catch bids if risk appetite continues to be buffeted by geopolitical uncertainty.
Canadian dollar (CAD) dips as oil prices soften
The Canadian dollar (CAD) traded with modest losses on Friday as a weakening of oil prices limited demand for the commodity-linked currency.
Expect movement in the ‘loonie’ to remain tied to oil price dynamics through Monday’s session, with more losses likely if we see a further moderation.
Australian dollar (AUD) underpinned by RBA rate bets
The Australian dollar (AUD) trended broadly higher through Monday’s Asian session, with Reserve Bank of Australia (RBA) interest rate hike expectations shielding the ‘Aussie’ from fresh market risk aversion.
New Zealand dollar (NZD) dented by risk-off flows
The New Zealand dollar (NZD) faltered in overnight trade as geopolitical uncertainty sapped the appeal of the ‘kiwi’.
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