Pound (GBP) firms as UK bond yields continue to fall
Trade in the pound (GBP) remained positive at the end of last week as a continued fall in UK bond yields helped to offset abysmal UK retail sales data.
Thin trading conditions resulting from a UK bank holiday then left Sterling directionless on Monday.
Turning to today’s session, the Confederation of British Industry’s (CBI) distributive trades index could sap Sterling sentiment if May’s data points to another sharp decline in sales volumes.
Euro (EUR) struggles as German business sentiment remains in the doldrums
The euro (EUR) was muted on Friday, as German business morale only saw a modest improvement this month, after plummeting to a six-year low in April.
EUR exchange rates then remained subdued through Monday’s session as most European markets remained closed for the bank holiday weekend.
In the absence of any notable Eurozone economic indicators, the euro may be left to trade without strong directional bias today.
US dollar (USD) fluctuates amid shifting Middle East peace hopes
The US dollar (USD) firmed at the end of last week as a risk-off market mood saw investors favour the safe-haven currency.
USD demand then slumped on Monday as market risk appetite improved following remarks from US President Donald Trump claiming a peace deal with Iran has been ‘largely negotiated’.
However, fresh US strikes at targets in Southern Iran this morning have cast doubt over any deal, and look to underpin the US dollar today.
Canadian dollar (CAD) slides despite robust retail sales data
The Canadian dollar (CAD) stumbled on Friday, with softer oil prices offsetting surprisingly upbeat domestic retail sales figures.
Expect movement in the ‘loonie’ to remain tied to oil prices today, with any further weakness likely to drag CAD lower again.
Australian dollar (AUD) pressured by Middle East jitters
The Australian dollar (AUD) softened through Tuesday’s Asian trading session, with renewed uncertainty in the Middle East limiting demand for the risk-sensitive currency.
New Zealand dollar (NZD) slips in cautious trade
The New Zealand dollar (NZD) also retreated overnight amid the prevailing risk-off market mood.
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