US dollar undermined by risk-positive trade

The US dollar ticked lower on Monday as a broadly optimistic mood limited demand for the safe-haven currency.

Meanwhile, trade in the pound is mixed so far this morning, with GBP/EUR flat at €1.1708 and GBP/USD climbing to $1.2795. GBP/CAD is rangebound at CA$1.7308, while GBP/AUD and GBP/NZD slip to AU$1.9858 and NZ$2.1465, respectively.

Looking ahead, will another slide in the Confederation of British Industry’s (CBI) industrial trends orders index pull Sterling lower this morning?

What’s been happening?

The US dollar got off to a poor start this week, with the appeal of the safe-haven currency being undermined by bullish trade sentiment.

Demand for the US dollar was also limited ahead of the start of the Federal Reserve’s annual Jackson Hole Symposium later in the week.

The euro’s negative correlation with the US dollar allowed the former to edge slightly higher on Monday.

However, the euro’s gains were capped by the publication of Germany’s latest producer price index, which surprised to the downside last month.

The pound, meanwhile, was stuck in a narrow range yesterday as a lack of notable data left Sterling to trade sideways.

What’s coming up?

This morning will see the publication of the CBI’s latest industrial trends orders index.

Today’s figures are expected to report its order book balance began to fall again in August, which could exert some pressure on the pound.

Meanwhile, USD investors will look to speeches from a number of Fed policymakers for fresh impetus today. While the main focus remains on the upcoming Jackson Hole Symposium, their comments could still impact the US dollar if they touch on monetary policy.

Finally, in the absence of any notable Eurozone data, movement in the euro may be limited today.