Pound (GBP) remains supported by positive data
The pound (GBP) trended broadly higher yesterday, as Friday’s upbeat run of UK economic data continued to underpin Sterling sentiment.
However, these gains proved modest, with GBP investors wary of the potential political ramifications of the upcoming by-election in Greater Manchester.
Turning to today’s session, the Confederation of British Industry’s latest distributive trends index may extend additional support to the pound if it points to an improvement in retail activity this month.
Euro (EUR) buoyed by improvement in German business morale
The euro (EUR) edged higher on Monday, supported by another uptick in Germany’s IFO business climate index.
Tempering these gains, however, were concerns about how new US tariffs may impact the previously negotiated EU-US trade framework.
Looking ahead, limited EUR data may leave the euro to trade without strong directional bias today.
US dollar (USD) dented by tariff uncertainty
The US dollar (USD) was subdued during yesterday’s session amid the uncertainty posed by US President Donald Trump’s new tariffs.
Adding to the confusion over how the tariffs will impact existing trade deals and potential refunds on US imports was a social media post from the President threatening to impose ‘much more powerful and obnoxious’ measures.
Unsurprisingly, US tariff headwinds will likely continue to influence USD demand through today’s session.
Canadian dollar (CAD) muted amid oil price volatility
The Canadian dollar (CAD) struggled to find any meaningful support on Monday, as the appeal of the commodity-linked currency was undermined by volatility in oil prices.
If this volatility persists, it's likely the ‘loonie’ will remain on the back foot through today’s session.
Australian dollar (AUD) firms ahead of inflation print
The Australian dollar (AUD) ticked higher overnight on Monday, on the expectation that Wednesday’s inflation data will reinforce bets for further interest rate hikes from the Reserve Bank of Australia (RBA).
New Zealand dollar (NZD) muted amid cautious mood
The New Zealand dollar (NZD) was rangebound in overnight trade amid a softening of market risk appetite.
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