Pound (GBP) mixed following Burnham’s by-election triumph
Trade in the pound (GBP) was mixed at the end of last week after Andy Burnham secured a decisive victory in the Makerfield by-election, putting him on a path to contest Prime Minister Keir Starmer for the Labour leadership.
While the result triggered a sharp rise in UK bond yields, Sterling was able to draw support from a much stronger-than-expected rebound in UK retail sales last month.
Looking ahead, Starmer is widely expected to announce his resignation later today, which could weigh on Sterling if it pushes up UK borrowing costs even further.
Euro (EUR) muted as German factory prices ease
The euro (EUR) was subdued on Friday as Germany reported a smaller-than-expected rise in its latest producer price index.
May’s month-on-month data showed factory-gate price growth slowed quite sharply, suggesting that inflationary pressures in the Eurozone’s largest economy are easing, tempering bets for further monetary tightening from the European Central Bank (ECB)
The Eurozone will publish its latest consumer confidence figures later today, where an improvement in morale this month may offer modest support for the single currency.
US dollar (USD) sidelined by thin trading conditions
The US dollar (USD) initially firmed on Friday as the abrupt cancellation of technical talks between the US and Iran spooked markets.
However, the ‘greenback’ was unable to sustain these gains through the session, as the closure of US markets for Juneteenth limited trading volumes in the currency.
Turning to the start of this week, barring any further setbacks in the Middle East peace process, demand for the safe-haven US dollar may be limited.
Canadian dollar (CAD) slips despite positive data
The Canadian dollar (CAD) closed last week’s session on a sour note as stronger-than-forecast domestic retail sales data failed to lift CAD sentiment.
Coming up, the publication of Canada’s consumer price index could provide some support for the ‘loonie’ today if another acceleration in inflation is seen as bolstering the case for a Bank of Canada (BoC) rate hike later in the year.
Australian dollar (AUD) rangebound in cautious trade
The Australian dollar (AUD) traded sideways through today’s Asian session, as a bearish market mood limited demand for the risk-sensitive currency.
New Zealand dollar (NZD) sidelined amid market uncertainty
The New Zealand dollar (NZD) was also trapped in a narrow range overnight as investors erred on the side of caution.
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