Pound (GBP) subdued amid Trump tariff concerns
The pound (GBP) struggled to gain traction on Monday following fresh warnings about the potential economic fallout from Donald Trump’s proposed tariffs.
The CEBR think tank suggested the UK economy could shrink by close to 1% if Trump proceeds with his plan to levy a 20% tariff on all imports.
Looking ahead, the pound may remain muted today as markets await the release of the UK’s latest inflation figures on Wednesday.
Euro (EUR) gains in cautious trade
The euro (EUR) strengthened on Monday as a risk-averse market mood increased its appeal among investors.
Additional support for the euro came from its inverse relationship with the US dollar (USD), as the latter faced headwinds.
This morning, the Eurozone will publish its latest consumer price index. However, unless there are significant revisions to October’s finalised figures, the euro’s response may be limited.
US dollar (USD) dips on fading Trump trade
The US dollar struggled to find support at the start of this week as a lack of notable US economic releases left the currency exposed.
The continued unwinding of the ‘Trump trade’ added to the pressure USD, with some investors opting to book their recent profits.
With US data still sparse today, the US dollar may remain on the back foot unless developments from the incoming US administration can revive market optimism.
Canadian dollar (CAD) climbs as oil prices recover
The Canadian dollar (CAD) ticked higher during Monday’s session, buoyed by a rebound in oil prices that lifted the commodity-linked currency.
Later today, Canada’s latest CPI figures are expected to show inflation picked up in October. If confirmed, this could bolster the ‘loonie’ by dampening speculation of potential Bank of Canada (BoC) rate cuts.
Australian dollar (AUD) edges higher on RBA optimism
The Australian dollar (AUD) firmed during overnight trade, with sentiment boosted by the Reserve Bank of Australia’s (RBA) latest meeting minutes. The minutes highlighted that the bank saw no “immediate need” to adjust interest rates.
New Zealand dollar (NZD) lifted by improved risk appetite
The New Zealand dollar (NZD) also strengthened overnight, as an uptick in market sentiment offered support to the risk-sensitive ‘kiwi’.