Pound (GBP) underpinned by positive manufacturing PMI
The pound (GBP) traded with modest support at the start of this week, following the release of the UK’s latest manufacturing PMI.
Factory sector growth was revised higher in January’s finalised figures, with the index striking its best levels since August 2024.
UK economic data is thin on the ground today, which could leave the pound to trade without directional bias today.
Euro (EUR) falters on soft German retail data
The euro (EUR) ticked lower on Monday as retail sales data from Germany failed to counter pressure from a stronger US dollar (USD).
While sales returned to growth in December, they remained weak, raising concern about the resilience of consumer spending in Europe’s largest economy.
Eurozone data is in short supply today, likely leaving the euro to trade sideways ahead of the bloc’s inflation print on Wednesday.
US dollar (USD) bolstered by market volatility
The US dollar opened this week on positive footing, extending the recovery seen through the end of last week’s session.
This was driven in part by volatility in commodity and equity markets, which drove bids for the safe-haven currency, with this upside then being reinforced by a surprise rebound in the ISM manufacturing PMI.
Coming up, the latest JOLTs job openings report could temper USD demand later today if it signals that the US labour market cooled in December.
Canadian dollar (CAD) pressured by oil price rout
The Canadian dollar (CAD) stumbled on Monday as easing tensions between the US and Iran triggered a roughly 5% drop in oil prices.
Expect the ‘loonie’ to remain on the defensive if this correction in oil prices persists through today’s session.
Australian dollar (AUD) rallies on RBA rate hike
The Australian dollar (AUD) surged overnight on Monday after the Reserve Bank of Australia (RBA) raised interest rates by 25bps and signalled that further tightening may be needed to bring inflation back under control.
New Zealand dollar (NZD) strengthens amid rebounding commodity prices
The New Zealand dollar (NZD) also rallied in overnight trade, buoyed by its positive correlation with the ‘Aussie’ and a rebound in commodity prices.
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