Pound (GBP) under pressure amid weak UK data
The pound (GBP) remained subdued at the end of last week, weighed down by growing speculation that the Bank of England (BoE) could accelerate interest rate cuts in the months ahead.
This followed a string of disappointing UK economic releases, including underwhelming employment and GDP figures.
Looking to the week ahead, GBP movement may be limited as investors adopt a cautious approach ahead of the BoE’s upcoming interest rate decision.
Euro (EUR) dips on profit-taking
The euro (EUR) edged lower on Friday as investors looked to lock in profits following Thursday’s gains.
Adding to the pressure on the single currency was its negative correlation with a resurgent US dollar (USD).
With no notable Eurozone data releases scheduled early this week, EUR exchange rates may lack a clear directional driver.
US dollar (USD) rallies amid Middle East tensions
The US dollar surged at the end of last week, as a series of Israeli strikes on Iranian nuclear and military facilities sparked a flight to safe-haven assets.
These gains were reinforced by stronger-than-expected US consumer sentiment data from the University of Michigan.
If geopolitical tensions continue to escalate, the US dollar could remain well-supported in the days ahead.
Canadian dollar (CAD) lifted by rising oil prices
The Canadian dollar (CAD) strengthened on Friday, tracking a sharp rise in oil prices amid concerns that the conflict in the Middle East could disrupt global supply.
Should this oil rally continue into the new week, the ‘loonie’ may hold on to its recent gains.
Australian dollar (AUD) flat in risk-averse trade
The Australian dollar (AUD) was muted overnight, with lingering market anxiety over the Middle East crisis dampening risk appetite.
New Zealand dollar (NZD) gains on commodity strength
Despite the prevailing risk-off mood, the New Zealand dollar (NZD) ticked higher overnight, supported by a continued rise in commodity prices.
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