Pound (GBP) unmoved by cabinet reshuffle
The pound (GBP) was steady on Monday as markets digested UK Prime Minister Keir Starmer’s cabinet reshuffle following the departure of Deputy Prime Minister Angela Rayner at the end of last week.
GBP investors appeared to take the reshuffle in their stride, reassured by the decision to keep Rachel Reeves as Chancellor, which seemed to limit volatility in the UK bond market.
GBP investors will look to a speech by the Bank of England’s (BoE) Sarah Breeden for fresh impetus today. A dovish tone from the BoE’s Deputy Governor for Financial Stability could dent demand for Sterling.
Euro (EUR) pressured by French political crisis
The euro (EUR) faced headwinds on Monday as France was plunged into a fresh political crisis, after Prime Minister Francois Bayrou lost a self-imposed confidence vote.
This largely offset the single currency’s negative correlation with the US dollar (USD), which otherwise may have propelled EUR higher during yesterday’s session.
Turning to today’s session, a lull in impactful Eurozone data may leave the euro to trade without any directional bias.
US dollar (USD) extends post-payroll selloff
The US dollar trended lower through yesterday’s session as Friday’s abysmal payroll report continued to exert pressure on the currency.
The USD selling bias remained in place as a growing number of investors priced in bets that the Federal Reserve will cut interest rates by 50 basis points later this month.
Coming up, the annual revision to payrolls will no doubt draw a lot of attention today. Economists are predicting that payrolls could be revised down by as much as 800,000, which could place further pressure on the US dollar.
Canadian dollar (CAD) buoyed by rising oil prices
The Canadian dollar (CAD) caught bids at the start of this week as an uptick in oil prices reflected positively on the commodity-linked currency.
CAD data remains in short supply today, likely leaving movement in the ‘loonie’ to remain linked to oil-price dynamics.
Australian dollar (AUD) firms despite softening morale
The Australian dollar (AUD) trended higher in overnight trade, with an uptick in market risk appetite offsetting a surprise deterioration in Australian consumer and business confidence.
New Zealand dollar (NZD) muted amid domestic economic concerns
The New Zealand dollar (NZD) traded sideways overnight on Monday, with growing concerns over New Zealand’s economic resilience limiting NZD’s risk-driven gains.
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