The Australian dollar trended lower through the majority of last week, with the risk-sensitive currency struggling to attract support as a gloomy market mood prevailed through most of the session.
Meanwhile, trade in the pound is a little mixed so far this morning, with GBP/EUR flat at €1.2026 and GBP/USD buoyed at $1.3434. GBP/CAD is rangebound at C$1.7099, while GBP/AUD and GBP/NZD slip to AU$1.9073 and NZ$2.0425, respectively.
Looking ahead, will a slowing of Eurozone GDP see the euro stumble at the start of this week?
The US dollar failed to stick the landing at the end of last week, with the currency falling victim to some profit taking after appreciating sharply earlier in the session.
What’s been happening?
Further undermining the appeal of the ‘greenback’ was the publication of the latest US personal spending index, which reported spending slumped in December for the first time in ten months.
The pound, meanwhile, ticked higher at the end of last week, with the currency appearing to benefit from the apparent delay of the Sue Gray report.
This uptick in Sterling was then reinforced by reports suggesting some positive progress was being made in Brexit talks regarding the Northern Ireland protocol.
At the same time, the euro struggled to attract support on Friday after Germany’s latest GDP figures reported a larger-than-expected contraction of economic growth in the fourth quarter.
Kicking of this week’s session we have the publication of the Eurozone’s latest GDP release. Will a drop in growth in the last quarter of 2021 weaken the euro?
What’s coming up?
Also influencing EUR exchange rates will be the preliminary release of Germany’s consumer price index, where an expected slowing of inflation could dent the single currency as it validates the European Central Bank’s (ECB) stance that the recent spike in inflation pressure is ‘transitory’.
For GBP investors the focus at the start of this week may remain on UK politics. If the Sue Gray report is finally published then the pound could be infused with some notable volatility.
Across the pond, the spotlight in the first half of the week will be on the ISM manufacturing PMI. A slowing of activity in the US factory sector this month could dampen the appeal of the US dollar.
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)