Pound (GBP) flat as UK business confidence weakens
The pound (GBP) was mostly rangebound through yesterday’s session amid a reported fall in UK business confidence.
A survey from KPMG and the Recruitment and Employment Confederation suggested a marked drop in sentiment at the end of 2025, with firms scaling back hiring amid rising costs and uncertainty.
Looking ahead, with UK data in short supply today, the pound may struggle to find any strong directional bias.
Euro (EUR) undermined by Trump’s Greenland threat
The euro (EUR) was subdued on Monday as US President Donald Trump repeated his comments on the US controlling Greenland, claiming the US will have it ‘one way or the other’.
The latest threat drove more investors to place a risk premium on the single currency ahead of talks between Denmark and the US later in the week.
Eurozone economic releases remain thin on the ground today, potentially leaving the single currency vulnerable to more Greenland risks.
US dollar (USD) slumps on Fed independence concerns
The US dollar (USD) stumbled out of the gate this week, following the news that the US Department of Justice has launched a criminal investigation into Federal Reserve Chair Jerome Powell.
Powell suggested the case is driven by his refusal to kowtow to President Donald Trump’s calls for more aggressive interest rate cuts, with USD investors alarmed by the potential implications for Fed independence.
The US central bank will remain in the spotlight today as the release of the latest US consumer price index may bolster Fed rate cut bets if inflation continued to cool in December.
Canadian dollar (CAD) muted as oil recovery stalls
The Canadian dollar (CAD) was subdued on Monday as the recent recovery in oil prices appeared to run out of steam.
Meanwhile, a rebound in oil prices following Trump’s threat to place a 25% tariff on countries doing business with Iran could help the ‘loonie’ recover today.
Australian dollar (AUD) dented by soft consumer confidence figures
The Australian dollar (AUD) was muted overnight on Monday, undermined by a surprise drop in Australian consumer sentiment this month.
New Zealand dollar (NZD) supported by rising business morale
The New Zealand dollar (NZD) edged higher in overnight trade as NZD investors welcomed an unexpected surge in domestic business confidence in the last quarter of 2025.
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