Pound (GBP) tumbles on GDP miss
The pound (GBP) faced heavy selling pressure at the end of last week, after the UK’s latest GDP figures reported the economy unexpectedly shrank by 0.1% in May.
This marked a second consecutive month of contraction, and stoked bets the Bank of England (BoE) will cut interest rates in August.
Sterling remains on the defensive at the start of this week, after BoE Governor Andrew Bailey told The Times that the bank may accelerate its rate cuts if the job market continues to slow.
Euro (EUR) gains capped by USD strength
The euro (EUR) ticked higher through Friday’s session as a cautious market mood bolstered demand for safe-haven assets.
However, the upside in EUR was ultimately capped by the single currency’s negative correlation with the US dollar (USD).
The euro faces resistance at the start of this week, after US President Donald Trump announced over the weekend that all goods from the EU will face a 30% tariff from 1 August.
US dollar (USD) firms amid trade uncertainty
The US dollar strengthened at the end of last week as investor sentiment deteriorated amid fresh trade uncertainty.
This followed a social post from Trump, in which he threatened to impose a new blanket 15-20% tariff on US trading partners from the start of August.
Trade developments will likely remain in focus for USD investors at the start of this week, potentially infusing further volatility into the US dollar.
Canadian dollar (CAD) undermined by Trump’s latest tariff threat
The Canadian dollar (CAD) struggled on Friday as Trump’s threat to impose a 35% tariff on Canadian goods offset a surprise fall in domestic unemployment last month.
Looking ahead, barring a breakthrough in trade talks, US-Canadian trade tensions could continue to drag on the ‘loonie’ at the start of this week.
Australian dollar (AUD) muted following Chinese trade data
The Australian dollar (AUD) was subdued through Monday’s Asian trading session, with a smaller-than-expected recovery in imports last month reflecting poorly on the ‘Aussie’.
New Zealand dollar (NZD) slips on disappointing data
The New Zealand dollar (NZD) trended lower in overnight trade as New Zealand’s latest services index remained in contraction territory for the fifth consecutive month.
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