Pound (GBP) bolstered by robust services data
The pound (GBP) strengthened at the close of last week’s session after the UK’s services PMI exceeded forecasts in December.
Sterling investors also took note of mounting inflationary pressures within the services sector, raising concerns that it could complicate the Bank of England’s (BoE) anticipated interest rate cut next month.
With little UK data due this week, GBP movement could be driven by broader market trends. A shift towards risk aversion might weigh on the pound.
Euro (EUR) climbs as Eurozone economy rebounds
The euro (EUR) advanced on Friday, supported by its negative correlation with the US dollar (USD) and encouraging Eurozone PMI figures.
January’s flash PMIs showed an unexpected return to growth for the Eurozone’s private sector, boosting investor confidence.
Today, the focus turns to Germany’s Ifo business climate index. If the survey indicates a further decline in business sentiment, the euro could come under pressure.
US dollar (USD) pressured by Trump remarks
The US dollar weakened at the end of last week after Donald Trump called for immediate rate cuts from the Federal Reserve.
The greenback faced additional pressure as the latest US PMIs revealed private sector activity slowed to its weakest level in nine months.
Looking ahead, the US dollar’s performance at the start of the week will likely remain tied to Trump’s remarks on policy, leaving it vulnerable to fresh volatility.
Canadian dollar (CAD) undermined by falling oil prices
The Canadian dollar (CAD) softened on Friday as a decline in oil prices dampened sentiment towards the commodity-tied currency.
With no major Canadian data on today’s docket, CAD exchange rates are likely to continue tracking oil price movements, potentially losing ground if crude prices remain under pressure.
Australian dollar (AUD) weakens amid risk-off sentiment
The Australian dollar (AUD) slipped in overnight trade as cautious market sentiment sapped demand for the risk-sensitive currency.
New Zealand dollar (NZD) subdued by market uncertainty
The New Zealand dollar (NZD) also trended lower during the Asian session, with bearish investor sentiment weighing on the appeal of the risk-sensitive currency.
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