Pound (GBP) fluctuates amid UK political uncertainty
The pound (GBP) proved remarkably resilient at the end of last week, despite notable Labour losses in the UK’s local elections.
Sterling was buoyed as Sir Keir Starmer’s pledge not to step down as Prime Minister reversed the recent rise in UK borrowing costs.
However, markets may have been too hasty in pricing out UK political risk, with GBP exchange rates under pressure this morning amid growing calls from within the Labour Party for Starmer to step down.
Euro (EUR) gains tempered by weak German data
The euro (EUR) trended broadly higher on Friday, supported by its inverse trade relationship with the US dollar (USD).
However, the single currency’s upside potential was ultimately capped, as data showed a surprise contraction in German industrial production in March.
Eurozone economic releases are in short supply at the start of this week, which could initially leave the euro to trade without direction.
US dollar (USD) slides in risk-positive trade
The US dollar closed last week’s session on the defensive, having shed almost all of the gains made late on Thursday after US President Donald Trump declared the US-Iran ceasefire remains intact, despite clashes in the Strait of Hormuz.
The pullback in USD also came as a record fall in US consumer confidence offset a stronger-than-expected US payrolls print.
Unsurprisingly, movement in the US dollar is likely to remain tied to developments in the Middle East at the start of this week, with fresh doubts over a potential peace deal already underpinning USD exchange rates this morning.
Canadian dollar (CAD) slumps amid worrying jobs data
The Canadian dollar (CAD) faced notable selling pressure on Friday after Canada’s latest jobs data reported the labour market unexpectedly shrank last month.
Looking ahead, the ‘loonie’ looks set to rally at the start of this week amid a rebound in oil prices.
Australian dollar (AUD) cushioned by Chinese inflation data
The Australian dollar (AUD) opened this week on the defensive amid a more cautious market mood, although positive inflation figures from China – Australia's largest trading partner – helped to temper these losses.
New Zealand dollar (NZD) slips in risk-off trade
The New Zealand dollar (NZD) also retreated in overnight trade as a risk-averse market mood saw investors shun the ‘kiwi’.
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