Pound (GBP) undermined by disappointing PMI
The pound (GBP) struggled to attract support at the end of last week’s session in response to the UK’s latest PMI data.
September’s finalised index was revised down from 51.9 to just 50.8, with the UK’s largest wealth-generating sector suffering its worst growth since April, and resulting in overall private sector growth all but flatlining last month.
UK economic releases are in short supply at the start of this week, potentially leaving movement in the currency to be driven by wider market trends.
Euro (EUR) supported by weak USD demand
The euro (EUR) trended broadly higher on Friday, with demand for the single currency firming thanks to its strong negative correlation with the US dollar (USD).
However, these gains remained limited in scope after a softer-than-expected Eurozone producer price index reading earlier in the session.
Today sees the release of the Eurozone’s latest retail sales figures. Economists predict that sales growth rebounded in August following a slump in July, which could provide a boost for the euro.
US dollar (USD) stumbles as US service sector stalls
The US dollar closed last week’s session on a sour note, following the release of a weaker-than-expected ISM services PMI.
September’s index fell from 52.0 to 50, missing forecasts for a more modest decline to 51.7, and revealing that growth in the US service sector actually stalled last month.
Amid the ongoing government shutdown and uncertainty over how its delays to key economic indicators may impact the Federal Reserve’s outlook on policy, the US dollar is likely to remain subdued today.
Canadian dollar (CAD) steady as oil prices tick up
The Canadian dollar (CAD) held steady on Friday, aided by a modest rebound in oil prices that arrested some of the currency’s earlier losses.
With OPEC members reportedly agreeing to more modest boosts in crude output than expected over the weekend, oil prices are continuing to rise, potentially offering additional support for CAD today.
Australian dollar (AUD) supported by hawkish RBA bets
The Australian dollar (AUD) trended broadly higher through Monday’s Asian trading session, underpinned by hawkish Reserve Bank of Australia (RBA) interest rate expectations.
New Zealand dollar (NZD) uneven in mixed trade
Trade in the New Zealand dollar (NZD) was mixed in overnight trade as a shifting market mood infused volatility into the risk-sensitive ‘kiwi’.
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