Pound (GBP) stable as UK borrowing costs retreat
The pound (GBP) traded sideways at the start of the week as falling energy prices helped to temper UK inflation concerns and pull 10-year UK gilt yields back below 5%.
The drop in borrowing costs was welcomed by the new Burnham government as it may make it easier to fund some of his more ambitious fiscal reforms.
Looking ahead, Sterling may continue to trade in a narrow range today, as GBP investors avoid taking any strong positions ahead of the Bank of England's (BoE) interest rate decision later in the week.
Euro (EUR) firms as gas concerns recede
The euro (EUR) traded with modest support yesterday, amid an easing of recent European gas concerns.
EUR sentiment suffered at the end of last week amid fears of a potential gas shortage this winter, but hopes for a fresh US-Iran ceasefire and resumption of energy shipments through the Gulf helped to curb these concerns.
EUR data is in short supply today, which could leave the euro to trade without strong directional bias.
US dollar (USD) slips amid pause in US-Iranian hostilities
The US dollar (USD) initially weakened on Monday, as an apparent de-escalation in the Middle East over the weekend stoked hopes for a new US-Iran ceasefire.
However, the ‘greenback’ rebounded later in the session as the improvement in risk appetite quickly faded.
Turning to today’s session, the safe-haven US dollar is likely to remain in demand amid a deepening AI selloff that has seen stocks among chipmakers plunge.
Canadian dollar (CAD) retreats as oil prices plunge
The Canadian dollar (CAD) stumbled out of the gates this week, as oil prices tumbled to around $90 per barrel on US-Iran peace hopes.
Expect the CAD selling bias to remain firmly in place if this correction in oil prices persists through today's session.
Australian dollar (AUD) slips despite hawkish RBA Bullock remarks
The Australian dollar (AUD) stumbled overnight amid a souring market mood, which offset remarks from Reserve Bank of Australia (RBA) Governor Michele Bullock, which hinted at the need for further policy tightening.
New Zealand dollar (NZD) subdued in risk-off trade
The New Zealand dollar (NZD) also struggled to attract support in overnight trade as the AI stock selloff sapped market risk appetite.
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