Pound (GBP) trims gains despite strong retail sales
The pound (GBP) initially strengthened on Friday after the UK’s latest retail sales figure smashed forecasts, printing at 1% rather than the expected 0.4%.
However, some profit-taking saw Sterling quickly trim its gains. In addition, worries about the Labour government’s ‘painful’ budget next month may have dampened GBP demand.
Today, GBP investors will be focused on the latest PMI results. Could a slowdown in UK business activity see Sterling stumble?
Euro (EUR) unclear in absence of data
The euro (EUR) was uncertain on Friday as a lack of Eurozone data left the common currency rudderless.
However, the safer euro was able to eke out some gains against its riskier rivals as the global market mood soured.
The Eurozone PMI surveys are also due out this morning. With private sector activity in the bloc expected to have declined this month, EUR may face selling pressure.
US dollar (USD) regains some ground as sentiment sours
While the aftermath of the Federal Reserve’s 50bps interest rate cut initially kept the US dollar (USD) subdued on Friday, USD was eventually able to recoup some losses.
The mild recovery came as risk sentiment soured, thereby boosting demand for the safe-haven ‘greenback’. Escalating tensions in the Middle East rattled global markets.
Later this afternoon, Fed policymaker Raphael Bostic is due to deliver a speech. As one of the more hawkish rate-setters at the US central bank, could Bostic’s comments lend USD support?
Canadian dollar (CAD) unmoved by upbeat sales data
The Canadian dollar (CAD) was unable to gain ground on Friday, despite stronger-than-expected domestic retail sales. Falling oil prices weighed on the crude-linked ‘loonie’.
Turning to today, Canadian economic data is in short supply. Therefore, oil price dynamics could drive most movement in the Canadian dollar.
Australian dollar (AUD) buoyed by risk-on flows
The Australian dollar (AUD) trended higher in overnight trade as an optimistic market mood helped to underpin the risk-sensitive currency.
New Zealand dollar (NZD) firms in upbeat trade
The New Zealand dollar (NZD) also edged higher during today’s Asian trading session thanks to positive risk flows.