Pound (GBP) undermined by rising bond yields
The pound (GBP) trended broadly lower at the start of this week, as renewed UK inflation fears linked to the spike in energy prices triggered a sharp rise in government borrowing.
With the odds of a Bank of England (BoE) interest rate cut this year swiftly evaporating, two-year bond yields saw their largest jump since Liz Truss’s disastrous mini-budget in 2022.
In the absence of notable UK economic data, any movement in the pound today is likely to be driven by wider market trends.
Euro (EUR) slides amid German factory slowdown
The euro (EUR) retreated through Monday’s session after data from Germany reported a contraction in both factory orders and industrial production at the start of 2026.
The lacklustre data compounded losses linked to the jump in oil prices and fresh fears of an energy price crisis in Europe.
Coming up, the euro may face headwinds again today, as Germany’s latest trade figures reported a larger-than-expected decline in exports in January.
US dollar (USD) finds fleeting gains on energy price volatility
The US dollar (USD) got off to a bullish start this week, with investors flocking to the safe-haven currency amid a surge in global energy prices that rattled markets.
However, the ‘greenback’ had relinquished almost all these gains by the end of the session following a press conference from US President Donald Trump, in which he claimed the war with Iran will be over ‘pretty quickly’.
Looking ahead, the US dollar may give up more ground through today’s session as the prospect of peace in the Middle East will likely cheer markets.
Canadian dollar (CAD) wobbles amid fluctuating oil prices
The Canadian dollar (CAD) enjoyed a strong start to this week’s session as the surge in oil prices reflected positively on the commodity-linked currency, but quickly fell back as prices began to retreat.
Expect the ‘loonie’ to continue to track oil price movements through today’s session.
Australian dollar (AUD) strengthens on upbeat confidence figures
The Australian dollar (AUD) trended higher through today’s Asian trading session, supported by a more risk-positive mood as well as a surprise improvement in domestic consumer confidence this month.
New Zealand dollar (NZD) ticks higher as risk appetite improves
The New Zealand dollar (NZD) was also buoyed in overnight trade as the prospect of an end to the war in the Middle East cheered markets.
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