Pound strengthens as UK service sector growth jumps to seven-month high

Pound (GBP) bolstered by jump in service sector activity

The pound (GBP) trended broadly higher yesterday as GBP investors welcomed the UK’s latest PMI releases.

Markets were particularly impressed by the surprise jump in the services index, with growth in the dominant sector rising to a seven-month high this month.

The Confederation of British Industry (CBI) will publish its latest distributive trends index later today. If UK retail sales volumes continue to decline, Sterling could face headwinds.

Euro (EUR) muted as Eurozone PMIs fall short

The euro (EUR) edged lower on Monday after the Eurozone’s own PMIs fell a little short of expectations.

Weaker-than-forecast services sector growth resulted in only a very modest acceleration in private sector activity as a whole, which could encourage the European Central Bank (ECB) to deliver another interest rate cut next month.

Coming up, Germany’s latest Ifo business climate index could bolster the euro today amid expectations the country’s new spending plans will propel morale to its highest level in several months.

US dollar (USD) falls as Trump hints at tariff ‘flexibility’

The US dollar (USD) got off to a slow start this week as positive risk flows limited demand for the safe-haven currency.

This was driven by hints from US President Donald Trump that the White House may be ‘flexible’ when it implements his reciprocal tariffs on 2 April.

If this trade optimism persists, we may see the US dollar extend these losses through today’s session.

Canadian dollar (CAD) weakens amid political uncertainty

The Canadian dollar (CAD) trended lower through Monday’s trading session, with investors wary of the currency after Prime Minister Mark Carney called a snap election for 28 April.

Canadian data remains thin on the ground today, likely leaving the ‘loonie’ vulnerable to political uncertainty and oil price dynamics.

Australian dollar (AUD) firms ahead of federal budget

The Australian dollar (AUD) maintained a positive trajectory overnight on Monday amid a sense of optimism ahead of Australia’s latest federal budget.

New Zealand dollar (NZD) muted in cautious trade

The New Zealand dollar (NZD) struggled to attract support in overnight trade as market risk appetite waned.

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