Pound (GBP) stumbles as UK economy faces ‘formidable’ challenges
The pound (GBP) faced headwinds at the end of last week amid fresh concerns over the pressures facing the UK economy.
Credit rating agency S&P Global warned that the recent setback to the government’s welfare reforms highlights the ‘formidable’ challenges it faces trying to balance the books.
UK economic releases are in short supply at the start of this week, likely leaving the pound’s movement to be dictated by wider market trends.
Euro (EUR) buoyed by Lagarde comments
The euro (EUR) trended broadly higher on Friday, with the single currency supported by hawkish remarks from European Central Bank (ECB) President Christine Lagarde.
However, these gains were tempered by Germany’s report of a much larger-than-expected contraction in factory orders in May.
Today sees the release of the Eurozone’s latest retail sales figures. If sales growth contracted as forecast in May, it will likely drag the euro lower.
US dollar (USD) firms despite US holiday
The US dollar (USD) closed last week’s session on a positive note as the cautious market mood saw investors favour the safe-haven currency.
The US dollar’s upside potential ultimately remained limited in scope amid thin trading conditions in the currency as US markets closed for Independence Day celebrations.
Fresh uncertainty surrounding US President Donald Trump’s tariffs could infuse volatility into the US dollar today, after the President and US Commerce Secretary offered conflicting statements on when Trump’s reciprocal tariffs will come into effect.
Canadian dollar (CAD) slides as oil prices soften
The Canadian dollar (CAD) declined on Friday as a weakening of oil prices hurt the commodity-linked currency.
US trade jitters could place oil prices under even more pressure through today’s session, potentially leading to further weakness in the ‘loonie’.
Australian dollar (AUD) slides on Trump’s BRICS tariff threat
The Australian dollar (AUD) stumbled through Monday’s Asian trading session in response to a social post from Trump in which he threatened to tariff any country that aligns with ‘the Anti-American policies of BRICS’.
New Zealand dollar (NZD) slips amid risk-off trade
The New Zealand dollar (NZD) also retreated in overnight trade as tariff uncertainty sapped market risk appetite.
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