Pound (GBP) trims gains after recovering retail sales
The pound (GBP) strengthened as Friday’s session started, thanks to a 0.5% recovery in UK retail sales in July.
However, Sterling surrendered a large portion of its gains in the afternoon as some investors decided to cash in on the currency’s strong recovery from the lows hit earlier in the week.
After last week’s volley of high-impact data, things are set to quieten down for the pound at the start of this week. Sterling could therefore be muted through today’s session.
Euro (EUR) mixed amid lack of data
The euro (EUR) traded without a clear trajectory at the end of last week as a lack of market-moving Eurozone data left the single currency rudderless.
A mostly risk-on market mood added to EUR’s uncertain movement, with the safer euro wobbling in different directions against many of its peers.
Turning to today, Eurozone economic data remains in short supply. As a result, the euro could struggle to find a clear direction once again.
US dollar (USD) weakens amid improving risk appetite
The safe-haven US dollar (USD) fell on Friday, as a risk-on market mood and declining US Treasury yields both dragged the ‘greenback’ lower.
A larger-than-expected rise in US consumer sentiment published in the afternoon stemmed USD’s losses, although the American currency was unable to recover.
Looking ahead, Federal Reserve policymaker Christopher Waller is due to speak later today. As Waller is one of the more hawkish rate-setters at the Fed, any pushback on rate cut bets could support USD.
Canadian dollar (CAD) slides as oil prices decline
The crude-linked Canadian dollar (CAD) was undermined by falling oil prices on Friday, while the currency’s positive correlation with the US dollar also dampened CAD demand.
With impactful Canadian data absent from the calendar today, oil prices and USD movement could continue to drive the Canadian dollar.
Australian dollar (AUD) firms in risk-on trade
The Australian dollar (AUD) appreciated overnight as weakness in the US dollar and an improving outlook for the global economy helped to underpin the ‘Aussie’.
New Zealand dollar (NZD) supported by rise in services PMI
The New Zealand dollar (NZD) firmed in overnight trade as New Zealand’s latest services PMI showed its first improvement in five months. Although the upside in the ‘kiwi’ was ultimately capped as the index remained in contraction territory.