Pound (GBP) muted despite sharp rebound in retail sales
The pound (GBP) was subdued at the end of last week as markets digested the UK’s latest retail sales data.
While sales growth rebounded at a much faster-than-expected pace last month, the data showed this was underpinned primarily by the rise in motor fuel prices, with sales volumes excluding fuel proving much more modest.
The Confederation of British Industry (CBI) will publish its latest distributive trades index later today, with Sterling poised to fall if the contraction in the UK’s retail trade balance deepened this month.
Euro (EUR) shrugs off weak German confidence data
The euro (EUR) edged higher on Friday, underpinned by its inverse trading relationship with the US dollar (USD).
This was enough to offset Germany’s latest IFO business climate index, which reported morale slumped to a six-year low in April.
Meanwhile, data showing that German consumer confidence has slumped to a three-year low may limit the euro’s upside potential this morning.
US dollar (USD) undermined by profit-taking
The US dollar ticked lower at the end of last week as it suffered from some profit-taking after climbing to a ten-day high earlier in the session.
However, the correction remained very modest amid the ongoing blockade of the Strait of Hormuz.
Looking ahead, events in the Middle East will likely continue to influence global risk appetite and demand for the US dollar at the start of this week. Reports suggest that Iran has offered the US a proposal to end the war, which is already cheering markets at the expense of the ‘greenback’.
Canadian dollar (CAD) muted as retail sales slow
The Canadian dollar (CAD) was subdued through Friday’s session, pressured by weaker-than-expected retail sales data.
Oil price dynamics are likely to dictate CAD demand through the start of this week, with the ‘loonie’ likely to firm if prices maintain an upward trajectory.
Australian dollar (AUD) buoyed by Middle East optimism
The Australian dollar (AUD) edged higher in overnight trade, after Axios reported that Iran has approached the US with an offer to reopen the Strait of Hormuz.
New Zealand dollar (NZD) lifted by risk-on flows
The New Zealand dollar (NZD) also ticked up through Monday’s Asian session amid the improving market mood linked to Iran’s proposal.
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