Pound (GBP) Regains Ground despite Services Slowdown
The Pound (GBP) initially dipped during Friday’s session, but managed to rebound in the afternoon, posting gains against both the Euro (EUR) and the US Dollar (USD).
The upside came despite a disappointing services PMI for August, which dropped from 59.6 to 55 as a fall in consumer spending and staff shortages slowed expansion in the UK services sector.
With UK data thin on the ground today, GBP exchange rates could face headwinds if worries over the supply chain crisis worsen.
Euro (EUR) Dips as Retail Sales Fall 2.3%
The Euro (EUR) slipped against many of its rivals on Friday as a slump in retail sales overshadowed a fairly positive services PMI.
Service activity in the Eurozone slowed in August, though remained close to the previous month’s 15-year high. However a shock decline in retail sales by 2.3% dented the single currency, causing it to lose ground against most of its peers.
Turning to today, EUR could make some gains after German factory orders unexpectedly increased in July by 3.4%, beating forecasts of a 1% decrease.
US Dollar (USD) Dented by Weak Jobs Data
The US Dollar (USD) continued its week-long decline on Friday, after the non-farm payrolls report fell far short of expectations.
The US economy added just 235,000 last month – its worst reading in seven months – compared to the 750,000 forecast. The slowdown in job creation came as the Delta variant of coronavirus continues to disrupt the US labour market and wider economy.
With no major market-moving data due out of the US today, the ‘Greenback’ could be primarily influenced by risk appetite.
Canadian Dollar (CAD) Wavers as Oil Prices Dip
The Canadian Dollar (CAD) had a mixed day through Friday’s session as oil prices dropped in the afternoon, dragging on the commodity-linked ‘Loonie’, while USD weakness offset the losses.
With Canadian data thin on the ground today, oil prices could determine the direction of CAD exchange rates.
Australian Dollar (AUD) Dips as Risk Appetite Fades
The Australian Dollar (AUD) trended lower in overnight trade, as a slight souring of market sentiment decreased the appeal of the risk-sensitive ‘Aussie’.
New Zealand Dollar (NZD) Ticks Lower on Market Mood
Likewise, the New Zealand Dollar (NZD) softened slightly overnight amid a small shift in market mood.