Pound (GBP) muted amid energy price uncertainty
The pound (GBP) was sidelined on Thursday by a lull in UK economic releases and the continued focus on global energy prices.
As oil and gas prices firmed, analysts speculated about the potential need for government support for energy bills later in the year and what this could mean for UK public finances.
Meanwhile, the pound faces headwinds this morning, after the UK’s latest GDP figures showed the economy unexpectedly stalled at the start of 2026.
Euro (EUR) slips amid continued USD demand
The euro (EUR) trended broadly lower yesterday, pressured by rising energy prices and its inverse trade relationship with the US dollar (USD).
Both were linked to events in the Middle East as Iran stepped up its efforts to disrupt energy markets, with fresh attacks on infrastructure and shipping in the region.
Turning to today’s session, the Eurozone’s latest industrial production figures may offer modest support to the euro if they report a rebound in factory output across the bloc at the start of the year.
US dollar (USD) rallies amid fresh escalation in the Middle East
The US dollar strengthened through yesterday’s session as rising geopolitical uncertainty bolstered the appeal of the safe-haven currency.
These gains were then reinforced as US initial jobless claims unexpectedly fell to 213,000 last week.
Coming up, the Federal Reserve’s preferred inflation indicator, the core PCE price index, could bolster the US dollar if it rose as expected in January.
Canadian dollar (CAD) bolstered by oil price rally
The Canadian dollar (CAD) strengthened on Thursday, with the latest rise in oil prices underpinning demand for the commodity-linked currency.
These gains may be swiftly tested, however, as Canada’s latest jobs report is expected to show a rise in unemployment last month.
Australian dollar (AUD) slides amid market risk aversion
The Australian dollar (AUD) retreated overnight on Thursday, pressured by a decline in risk appetite as events in the Middle East continue to escalate.
New Zealand dollar (NZD) slumps in downbeat trade
The New Zealand dollar (NZD) also faced heavy selling pressure overnight as investors shunned risk-sensitive assets.
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