Pound (GBP) rangebound despite UK-China agreement
The pound (GBP) remained confined to a narrow range yesterday, with GBP investors seemingly unfazed by a series of new agreements signed between the UK and China.
While the UK government sought to play up the significance of the deals signed in Beijing, analysts suggested they would have a nominal impact on the UK economy.
Looking ahead, Sterling may remain adrift through the remainder of the week amid the continued absence of any UK economic indicators.
Euro (EUR) subdued amid ECB easing speculation
The euro (EUR) was muted on Thursday, with recent remarks from European Central Bank (ECB) officials on the strength of the single currency continuing to impact EUR sentiment.
This offset the release of the Eurozone’s latest economic sentiment index, which climbed to a three-year high this month.
Turning to today’s session, the spotlight will be on the Eurozone’s latest GDP print, with the euro potentially stumbling if growth moderated in the last quarter of 2025.
US dollar (USD) rebounds as Warsh leads Fed race
The US dollar (USD) initially stumbled yesterday as ongoing US government shutdown fears led investors to price additional risk premiums into USD.
However, the US dollar then rebounded late in the session, buoyed by expectations that US President Donald Trump will nominate Kevin Warsh as the next Chair of the Federal Reserve.
Warsh is seen as the least dovish candidate remaining on Trump’s shortlist. If confirmed, this could extend additional support for the US dollar through today’s session.
Canadian dollar (CAD) underpinned by rising oil prices
The Canadian dollar (CAD) strengthened on Thursday as the appeal of the commodity-linked currency was bolstered by a sharp rise in oil prices.
If oil prices continue to push to new multi-month highs, the ‘loonie’ may continue to catch bids through the end of the week.
Australian dollar (AUD) slips amid USD recovery
The Australian dollar (AUD) weakened overnight on Thursday, with the rebound in the US dollar and falling commodity prices dragging on the ‘Aussie’.
New Zealand dollar (NZD) pressured by drop in risk appetite
The New Zealand dollar (NZD) also retreated in overnight trade, amid the deterioration in market risk appetite.
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