Pound (GBP) flat as focus turns to BoE
The pound (GBP) traded in a narrow range on Friday as the continued lull in UK data saw GBP investors turn their attention to the Bank of England’s (BoE) interest rate decision later this week.
While the BoE is expected to leave rates on hold this month, GBP investors are wary of the bank’s forward guidance and whether it could signal a rate cut in March.
In the meantime, confirmation that growth in the UK manufacturing sector accelerated in January could lend support to Sterling at the start of this week.
Euro (EUR) undermined by USD demand
The euro (EUR) ticked lower on Friday, undermined by its strong negative correlation with the US dollar (USD).
This offset the release of the Eurozone’s latest GDP figures, which reported the bloc’s economy continued to expand at 0.3% in the last quarter of 2025, rather than slowing to 0.2% as forecast.
This week’s European session opened with a surprise rebound in German retail sales, which may extend support to the euro this morning.
US dollar (USD) bolstered by positive reception to Trump’s Fed pick
The US dollar closed last week’s session on the front foot as President Donald Trump confirmed the nomination of Kevin Warsh as the next Chair of the Federal Reserve.
As a former Fed Governor, Warsh is seen as the most credible and least dovish of the candidates who remained on Trump’s shortlist, and it's hoped that his appointment will also help underpin the US central bank’s independence.
Coming up, the release of the latest ISM manufacturing PMI may extend the US dollar’s recovery through the start of this week if it reports an improvement in US factory sector activity last month.
Canadian dollar (CAD) muted as GDP Stalls
The Canadian dollar (CAD) was subdued on Friday as data showed that Canadian GDP stalled in November.
Turning to today’s session, movement in the ‘Loonie’ may be driven primarily by oil price dynamics, potentially leaving the ‘loonie’ vulnerable to further losses as oil prices plummet.
Australian dollar (AUD) weakens amid plummeting commodity prices
The Australian dollar (AUD) opened this week on the defensive, pressured by sharp falls in commodity prices.
New Zealand dollar (NZD) pressured by investor caution
The New Zealand dollar (NZD) also weakened through Monday’s Asian session amid a cautious market mood.
Never miss a movement. Create a free account with Currencies Direct to get the latest currency news delivered straight to your inbox. You can also set up rate alerts and check live rates 24/7.
