Pound (GBP) wavers despite BoE remarks
The pound (GBP) had a mixed start to the week, despite some hawkish comments from Bank of England (BoE) Deputy Governor Clare Lombardelli.
Although the policymaker said it was ‘too early to declare victory on inflation’, Sterling struggled to sustain any upside momentum amid concerns about the UK economy.
Amid a lack of more impactful data, the Confederation of British Industry’s (CBI) latest distributive trades survey could impact the pound today. Could another contraction in sales volumes hurt GBP?
Euro (EUR) boosted as US tariff fears ease
The euro (EUR) began the week on a strong note as Donald Trump’s pick for Treasury Secretary announced over the weekend helped ease fears of damaging tariffs on the Eurozone.
Trump’s choice of Scott Bessent to lead the Treasury was interpreted by analysts as a signal that the incoming US administration might adopt a softer stance on EU trade taxes than initially feared.
Eurozone economic data is in short supply today, which could leave EUR movement muted.
US dollar (USD) slips amid upbeat mood
The safe-haven US dollar (USD) fell on Monday as markets welcomed Trump’s choice of Bessent to head the US Treasury, leading to a cheery tone.
In addition, Bessent’s nomination led to a slight pullback in US inflation expectations, thereby increasing bets on more Federal Reserve interest rate cuts.
Looking ahead, the Fed meeting minutes are the focus for USD investors. Any hints that the bank plans to cut rates again in December could see the ‘greenback’ fall further.
Canadian dollar (CAD) falls on softer oil and USD
The Canadian dollar (CAD) retreated against most of its rivals yesterday, as the currency’s positive correlation with both the US dollar and oil prices pressured CAD.
Oil prices may drive the commodity-linked ‘loonie’ today. Could a renewed upside in oil lift CAD?
Australian dollar (AUD) falls on Trump China tariff fears
The Australian dollar (AUD) wavered lower overnight after Donald Trump said he would be charging an additional 10% tariff on China, on top of other planned tariff increases. This dented the ‘Aussie’, as AUD often trades as a proxy for the Chinese economy.
New Zealand dollar (NZD) rebounds despite risk-off mood
The New Zealand dollar (NZD) also dropped last night amid tariff fears, although the ‘kiwi’ managed to rebound fairly quickly, despite a lack of data.