Pound (GBP) pressured by GDP disappointment
The pound (GBP) closed last week’s session on the back foot, coming under significant selling pressure following the release of the latest UK GDP figures.
The data revealed a surprising contraction in economic activity at the start of the fourth quarter, catching markets off guard and raising fresh concerns about the UK’s economic outlook.
Coming up, this morning will see the publication of the UK’s preliminary PMI figures for December. Expected to see Sterling sentiment weaken if UK private sector growth stalled this month.
Euro (EUR) firms on USD weakness
The euro (EUR) trended broadly higher on Friday, with the single currency benefitting from its negative correlation with the US dollar (USD) as the latter weakened.
Adding to the euro’s strength was the release of stronger-than-expected industrial production figures from the Eurozone.
However, the euro may struggle to maintain this upward momentum at the start of this week. The Eurozone PMIs are forecast to report that private sector activity remained in the doldrums this month.
US dollar (USD) undermined by risk-on flows
The US dollar ended last week on a sour note, as the upbeat market mood which prevailed through the European trading session sapped the appeal of the safe-haven currency.
However, helping to limit these losses was a modest uptick in US Treasury yields through Friday’s session.
While not as influential as the ISM releases, the latest US S&P PMIs may revive USD demand later today if they point to a strong end to the year for the US economy.
Canadian dollar (CAD) muted amid BoC speculation
The Canadian dollar (CAD) was subdued on Friday, amid speculation the Bank of Canada (BoC) may continue to cut interest rates, despite a hawkish shift in the language used following its latest policy meeting earlier in the week.
In the absence of any notable Canadian data, movement in the commodity-linked ‘loonie’ may be driven by oil prices dynamics today. Will a drop in oil prices undermine CAD exchange rates?
Australian dollar (AUD) muted by weaker PMIs
The Australian dollar (AUD) traded sideways overnight, with the ‘Aussie’ managing to avoid losses despite weaker PMI data and a risk-off market mood.
New Zealand dollar (NZD) ticks higher despite risk aversion
The New Zealand dollar (NZD) gained ground last night despite a cautious market mood and a lack of market-moving New Zealand data.
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