Pound (GBP) struggles amid lack of catalyst
The pound (GBP) was muted on Friday as an ongoing lull in UK economic data left the currency directionless.
Sterling then remained adrift through the start of this week as the UK bank holiday resulted in thin trading conditions in the currency.
This morning will see the publication of the UK's finalised manufacturing PMI for August, but barring a major deviation from the preliminary figures, they may only have a limited impact on GBP exchange rates.
Euro (EUR) pressured by USD strength
The euro (EUR) struggled on Friday, as its strong negative correlation with the US dollar (USD) offset a stronger-than-expected improvement in Eurozone economic sentiment last month.
EUR exchange rates then edged higher at the start of this week, drawing support from European Central Bank (ECB) interest rate hike expectations.
Centre stage today is the release of the Eurozone's consumer price index, with an expected acceleration in inflation likely to reflect positively on the single currency.
US dollar (USD) rallies as Warsh revives September rate hike odds
The US dollar closed last week's session on a positive note as investors seized on remarks made by Federal Reserve Chair Kevin Warsh in his Jackson Hole speech.
Warsh signalled the bank has 'more work to do' on inflation, which revived bets the Fed may hike interest rates in September, although a spike in US bond yields reversed some of these gains on Monday.
A key focus for USD investors today will be the latest US employment data, as another fall in job openings could spark fresh fears that the labour market is cooling.
Canadian dollar (CAD) buoyed by rebound in GDP
A sharp acceleration in domestic GDP growth in the second quarter reflected positively on the Canadian dollar (CAD) at the end of last week, although the 'loonie' struggled to sustain this support amid ongoing trade jitters.
Looking ahead, the 'loonie' could face fresh selling pressure today, amid persistent US-Canada trade war concerns.
Australian dollar (AUD) underpinned by strong Chinese factory growth
The Australian dollar (AUD) traded with modest support overnight on Monday as China's latest manufacturing PMI beat forecasts.
New Zealand dollar (NZD) rangebound ahead of RBNZ rate decision
The New Zealand dollar (NZD) traded sideways overnight, with NZD investors erring on the side of caution ahead of the Reserve Bank of New Zealand's (RBNZ) interest rate decision on Wednesday.
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