US dollar slides amid improving market mood

Pound (GBP) directionless amid data lull

The pound (GBP) traded without clear direction on Monday as investors held fire ahead of a series of high-impact UK events later this week.

Sterling moved unevenly, slipping against stronger peers while gaining ground on weaker rivals.

Looking to today, GBP exchange rates may remain subdued in the continued absence of fresh UK data, with traders likely waiting for tomorrow’s key consumer price index for May.

Euro (EUR) strengthens as USD weakens

The euro (EUR) climbed yesterday, buoyed by its negative correlation with a weakening US dollar (USD).

However, risk appetite dampened demand for the safer euro against riskier currencies, limiting its upside potential.

Today, all eyes turn to Germany’s ZEW economic sentiment index. If sentiment in the Eurozone’s largest economy shows improvement as expected, the euro could find fresh support.

US dollar (USD) retreats as risk appetite returns

The safe-haven US dollar lost ground on Monday amid a shift in risk sentiment, with investors reassured by news that the Strait of Hormuz remained open despite ongoing tensions between Israel and Iran.

Additional pressure came from soft US data, as the New York Empire State Manufacturing Index dropped to its lowest level since March, marking the fourth straight decline in business conditions.

Today’s spotlight falls on US retail sales. A projected 0.7% drop in monthly sales could push USD lower once again.

Canadian dollar (CAD) mixed as oil prices slip

The commodity-sensitive Canadian dollar (CAD) traded without a clear bias yesterday. While oil prices retreated from recent highs, they remained elevated following Friday’s rally, holding above $70 a barrel.

CAD movement today may continue to track oil market dynamics, while this evening’s Bank of Canada (BoC) meeting minutes could also influence direction.

Australian dollar (AUD) fluctuates on shifting sentiment

The risk-sensitive Australian dollar (AUD) see-sawed overnight, initially slipping before bouncing back amid speculation that Donald Trump had left the G7 early to focus on brokering a ceasefire between Israel and Iran – a claim the US President later denied.

New Zealand dollar (NZD) rangebound amid cautious trade

The New Zealand dollar (NZD) also moved without clear direction overnight, buffeted by mixed market sentiment and limited data cues.

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