Pound (GBP) falls as market sentiment sours
The pound (GBP) faced selling pressure on Friday as a souring market mood put pressure on the increasingly risk-sensitive UK currency.
Meanwhile, a lack of British economic data left GBP without support.
Looking at the week ahead, UK data is thin on the ground until the latest consumer price index on Wednesday. With inflation expected to ease to the Bank of England’s (BoE) 2% target, Sterling could stumble in the middle of the week.
Euro (EUR) pressured by continuing political angst
Ongoing political anxiety in the EU weighed on the euro (EUR) on Friday, amid worries that the upcoming French election could result in a financial crisis for the country.
Investors were fearful that President Emmanuel Macron’s centrist alliance will lose power next month, with some analysts warning that populist fiscal polices could spook markets. French stocks and bonds took a hit, as did the euro.
If anxiety persists today, the single currency could remain under pressure amid a lack of impactful Eurozone data.
US dollar (USD) climbs amid risk-off mood
The safe-haven US dollar (USD) strengthened at the end of last week’s session, striking a five-week high, as risk aversion swept markets and boosted USD’s appeal.
Weaker US data capped the currency’s progress later in the session, as the latest consumer confidence index showed an unexpected decline in morale this month.
Risk appetite could continue to drive the US dollar today as American data releases are absent from the calendar. Could continued risk aversion see USD push higher?
Canadian dollar (CAD) buoyed by rising oil prices
The crude-linked Canadian dollar (CAD) climbed on Friday as rising oil prices boosted demand for the ‘loonie’.
Amid a lack of Canadian economic data today, oil prices could continue to influence CAD. Crude has fallen this morning; further losses could dent the Canadian dollar.
Australian dollar (AUD) weakens amid market risk aversion
The Australian dollar (AUD) lost ground during the overnight session, with a gloomy market mood sapping the risk-sensitive currency’s appeal.
New Zealand dollar (NZD) slides as services activity contracts
The New Zealand dollar (NZD) faced headwinds overnight, with the ‘kiwi’ falling following a larger-than-forecast contraction in the New Zealand services index for May.