Pound (GBP) muted as services PMI disappoints
The pound (GBP) struggled for direction yesterday, following the release of the UK’s latest services PMI report.
December’s finalised index was revised lower, exacerbating concerns over the UK’s fragile economic outlook.
With no notable UK data releases today, Sterling may remain under pressure amid lingering economic concerns.
Euro (EUR) supported by German inflation uptick
The euro (EUR) found some support on Monday after Germany’s consumer price index showed inflation rose more than expected in December.
This unexpected increase reduced expectations of European Central Bank (ECB) interest rate cuts, though speculation of a potential January cut capped the euro’s gains.
Eurozone-wide CPI figures will be in focus today. If the data mirrors Germany’s inflation surge, the euro could gain further momentum.
US dollar (USD) slides amid Trump tariff speculation
The US dollar (USD) stumbled at the start of the week after reports suggested Donald Trump’s economic advisers are considering a more selective approach to tariffs, contrary to his campaign pledges.
Although Trump denied the claims, the report dented the ‘greenback,’ which had been buoyed by expectations that broader tariffs could boost inflation and reduce the likelihood of further Federal Reserve rate cuts.
Later today, the US dollar may attempt to recover as the ISM services PMI is forecast to show stronger growth in the service sector.
Canadian dollar (CAD) steady amid political uncertainty
The Canadian dollar (CAD) was rangebound on Monday, weighed down by the uncertainty surrounding the resignation by Canadian Prime Minister Justin Trudeau.
Canada’s Ivey PMI is due for release today. If December’s figures show a recovery in private sector activity, the CAD could edge higher.
Australian dollar (AUD) strengthens on risk-on sentiment
The Australian dollar (AUD) rose in overnight trade on Monday, benefiting from improved market risk appetite.
New Zealand dollar (NZD) lifted by risk-on mood
The New Zealand dollar (NZD) also advanced overnight, bolstered by the uptick in global market optimism.
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