Pound (GBP) muted on BoE Bailey comments
The pound (GBP) was muted through the end of last week, following remarks from Bank of England (BoE) Governor Andrew Bailey.
Bailey’s comments appeared to cast fresh doubt on a potential rate hike in June as he said that, given the ‘softness in the real economy’, it’s appropriate for the bank to ‘tolerate temporarily above target inflation’.
UK economic data is in short supply through the first half of this week, which could leave Sterling to trade without strong directional bias today.
Euro (EUR) flat following shock drop in German inflation
The euro (EUR) struggled to attract support through the end of last week’s session, following the publication of Germany’s latest consumer price index.
May’s preliminary CPI figures reported a surprise slowdown in inflation, which saw some EUR investors trim their more aggressive expectations for European Central Bank (ECB) monetary tightening in the second half of 2026.
Coming up, the latest consumer survey from the ECB could lift the euro this morning if inflation expectations continued to rise in April.
US dollar (USD) flat as US and Iran reportedly ‘very close’ to peace agreement
The US dollar (USD) faced headwinds at the end of last week as fresh hopes that the US and Iran are inching closer to a peace deal tempered demand for safe-haven assets.
However, the ‘greenback’ was ultimately able to hold its ground following hawkish remarks from Federal Reserve policymakers Jeff Schmid and Michelle Bowman.
Potentially distracting USD investors from the Middle East at the start of this week will be the latest ISM manufacturing PMI. Will continued resilience in the US factory sector provide a boost for the US dollar?
Canadian dollar (CAD) slides on lacklustre GDP data
The Canadian dollar (CAD) retreated on Friday after Canada’s latest GDP figures showed domestic growth stalled in the first quarter.
Expect the ‘loonie’ to remain on the defensive through the start of this week if oil prices continue to soften.
Australian dollar (AUD) flat on mixed Chinese factory data
The Australian dollar (AUD) traded in a narrow range through Monday’s Asian trading session, as Australia’s largest trading partner, China, reported a slowdown in factory sector growth last month.
New Zealand dollar (NZD) dented by profit-taking
The New Zealand dollar (NZD) ticked lower overnight, with the ‘kiwi’ suffering from some profit-taking after soaring last week on hawkish Reserve Bank of New Zealand (RBNZ) rate hike bets.
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