Pound (GBP) muted amid lull in data
The pound (GBP) traded without strong directional bias at the start of this week in the continued absence of any UK economic data of note.
This left Sterling exposed to the negative risk sentiment which prevailed through Monday’s session.
Kicking off today’s session was the publication of the UK’s latest jobs report. July’s figures reported another fall in unemployment, which appears to have offset a slowdown in wage growth over the same period.
Euro (EUR) pressured by USD strength
The euro (EUR) faltered on Monday as the single currency was undermined by its negative correlation with the US dollar (USD).
EUR investors were also reluctant to make any aggressive bets yesterday as they brace for the European Central Bank’s (ECB) interest rate decision later in the week.
Meanwhile, confirmation that Germany inflation slowed sharply last month is likely to act as a headwind for the euro during today’s session.
US dollar (USD) firms in cautious trade
The US dollar got off to a positive start this week as a risk-averse market mood saw investors favour the safe-haven currency.
Renewed jitters regarding a potential US recession spooked in markets and strengthened USD demand, while an uptick in US Treasury yields also extended support to the US dollar during yesterday’s session
The US dollar may continue to catch bids today if traders remain wary ahead of high-impact macroeconomic releases like the latest US inflation figures later in the week.
Canadian dollar (CAD) buoyed by rising oil prices
The Canadian dollar (CAD) edged higher on Monday as the currency was underpinned by a rebound in oil prices.
Looking ahead, oil prices may continue to appreciate as a hurricane threatens to disrupt crude production along the US Gulf Coast, likely lifting the ‘loonie’ in the process.
Australian dollar (AUD) firms despite lacklustre data
The Australian dollar (AUD) ticked higher overnight on Monday, with the ‘Aussie’ shrugging off weaker-than-expected domestic consumer and business confidence figures, thanks to an improving market mood.
New Zealand dollar (NZD) buoyed by market risk appetite
The New Zealand dollar (NZD) also appreciated in overnight trade as a risk-positive market mood made the currency more attractive to investors.