Pound (GBP) slumps as UK GDP stalls
The pound (GBP) closed last week’s session on a sour note, after the UK’s latest GDP figures showed the economy got off to a slow start in 2026.
Figures published by the Office for National Statistics (ONS) showed the economy unexpectedly stagnated in January, raising wider fears about the UK’s economic trajectory amid the current inflationary backdrop.
Looking ahead, GBP data is thin on the ground until the second half of the week, leaving Sterling sensitive to wider market trends today.
Euro (EUR) remains muted amid energy uncertainty
The euro (EUR) was subdued on Friday amid ongoing concerns about how higher energy prices will affect Eurozone economic activity in the coming months.
This was compounded by the Eurozone’s latest industrial production figures, which reported that manufacturing activity was already soft before the threat of higher input prices.
If energy prices remain elevated and investors continue to favour the US dollar (USD), the euro will likely remain under pressure at the start of this week.
US dollar (USD) bolstered by ongoing geopolitical jitters
The US dollar continued to outperform most of its peers at the end of last week, as escalating tensions in the Middle East underpinned safe-haven demand.
However, the US dollar’s gains were tempered after the latest US GDP report saw growth revised down to just 0.7% in the last quarter of 2025.
Turning to the start of this week, liquidity in the US dollar is likely to remain high as the conflict in the Middle East stretches into its third week.
Canadian dollar (CAD) undermined by rising unemployment
The Canadian dollar (CAD) faced headwinds on Friday after Canada reported a larger-than-expected rise in unemployment last month.
Canada will publish its latest consumer price index at the start of this week’s session, with signs of sticky inflation potentially reviving demand for the ‘loonie’.
Australian dollar (AUD) lifted by Hormuz headlines
The Australian dollar (AUD) strengthened through Monday’s Asian trading session, supported by the optimism that surrounds reports that a coalition of nations may send warships to protect shipping through the Strait of Hormuz.
New Zealand dollar (NZD) rallies amid positive risk flows
The New Zealand dollar (NZD) also firmed in overnight trade amid the cautious optimism regarding plans to unlock the Strait of Hormuz.
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