Pound (GBP) falters after retail data falls short
The pound (GBP) ended last week on a weaker footing after the UK’s retail sales figures disappointed expectations.
Although June data showed a modest recovery following May’s steep decline, the rebound wasn’t as strong as forecast, which left Sterling exposed to further downside pressure.
Attention now turns to today’s Confederation of British Industry (CBI) distributive trades survey. If the retail volume index reveals another steep decline, it could weigh on GBP.
Euro (EUR) lifted by trade deal optimism
The euro (EUR) advanced on Friday, buoyed by growing optimism that a long-awaited EU-US trade agreement was close.
The single currency also drew support from the European Central Bank’s (ECB) latest policy decision, with President Christine Lagarde’s comments striking a more hawkish chord than markets had anticipated.
News over the weekend that Brussels and Washington have officially reached a trade deal is likely to provide the euro with additional upside momentum today.
US dollar (USD) rallies on trade tailwinds
The US dollar (USD) gained ground to close out last week, with investors responding positively to the announcement of new bilateral trade pacts, helping to dampen fears of further ‘Liberation Day’ style disruptions.
Adding to the US dollar’s appeal were upbeat PMI figures from the previous day, which signalled robust performance in the US private sector.
Trade optimism looks set to continue supporting USD at the start of the week, with the US-EU deal already boosting the 'greenback’.
Canadian dollar (CAD) climbs as oil prices rise
The Canadian dollar (CAD) edged higher on Friday, benefiting from a renewed uptrend in crude prices, which boosted demand for the oil-linked currency.
With Canada’s economic calendar fairly quiet in the short term, oil price trends are expected to remain the key driver for CAD.
Australian dollar (AUD) slips as dollar strengthens
The Australian dollar (AUD) began the week on the back foot, retreating during Monday’s Asian session as the US dollar’s resurgence sapped risk appetite and weighed on the ‘Aussie’.
New Zealand dollar (NZD) weakens in risk-off environment
The New Zealand dollar (NZD) followed a similar trajectory overnight, with a cautious market mood prompting investors to reduce exposure to the risk-sensitive ‘kiwi’.
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