US dollar subdued as Trump’s ‘Big Beautiful’ bill revives debt concerns

Pound (GBP) pressured by falling household income

The pound (GBP) stumbled at the start of this week, despite the UK’s latest GDP figures confirming that the country was the fastest-growing economy in the G7 during the first three months of the year.

Sterling sentiment faltered as the GDP figures were accompanied by data showing that real household disposable income per head suffered its first quarterly decline in almost two years.

Coming up, Bank of England (BoE) Governor Andrew Bailey is scheduled to speak at the European Central Bank’s (ECB) annual Sintra forum later today. GBP investors will watch his comments for any additional hints on monetary policy.

Euro (EUR) sidelined by slowing German inflation

The euro (EUR) struggled to attract support yesterday, as EUR investors digested Germany’s latest economic releases.

EUR sentiment was suppressed through the latter half of the session after Germany’s consumer price index reported a shock cooling of inflation last month.

If this is mirrored in the Eurozone’s CPI figures later today, it may revive bets for a potential ECB interest rate cut later this month and pull the euro lower.

US dollar (USD) undermined by debt concerns

The US dollar (USD) got off to a slow start this week as President Donald Trump’s Big Beautiful Bill was back in the headlines after narrowly clearing an initial Senate vote.

The renewed focus on the bill sapped USD sentiment as it revived US deficit concerns, particularly in the wake of revised forecasts which suggest it will add $3.3 trillion to the national debt over the next decade.

A couple of key US economic releases will keep USD investors on their toes today. Signs of a slowing US labour market, coupled with another contraction in growth in the US factory sector last month, are likely to stoke Federal Reserve rate cut speculation and drag on the US dollar.

Canadian dollar (CAD) flat as US-Canada trade talks resume

The Canadian dollar (CAD) stabilised on Monday, with the currency recouping some of Friday’s losses after the Canadian government withdrew its digital tax plans, allowing for the restart of US-Canadian trade talks.

Barring any further trade developments, oil price dynamics will likely act as the primary catalyst of movement for the ‘loonie’ through today’s session.

Australian dollar (AUD) bolstered by upbeat Chinese manufacturing PMI

The Australian dollar (AUD) trended higher overnight on Monday, supported by China’s latest Caixin PMI, which reported a surprise rebound in factory sector activity last month.

New Zealand dollar (NZD) firms in optimistic trade

The New Zealand dollar (NZD) also appreciated in overnight trade, amid a broadly risk-positive market mood.

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