Pound (GBP) supported by UK growth hopes
The pound (GBP) opened the week on solid footing, buoyed by optimism surrounding the UK government’s plans to stimulate growth through changes to planning regulations.
This came despite a pessimistic outlook from Morgan Stanley, which revised its 2025 UK growth forecast from 1.3% to 0.9%.
With no key UK data releases today, the pound could find itself influenced by market sentiment. A shift to risk aversion might see Sterling give up some of its gains.
Euro (EUR) boosted by upbeat German sentiment
The euro (EUR) ticked higher on Monday following better-than-expected economic data from Germany.
The IFO business climate index revealed an unexpected improvement in business sentiment, defying expectations that it would remain at its lowest levels since the onset of the COVID pandemic.
Today, EUR investors will scrutinise a speech from European Central Bank (ECB) President Christine Lagarde. Any dovish signals could weigh on the euro ahead of Thursday’s interest rate announcement.
US dollar (USD) weakens as tariff concerns fade
The US dollar (USD) traded on a mixed footing at the start of the week, with early gains erased after President Trump reversed plans to impose heavy tariffs on Columbia.
Investors also appeared hesitant to make significant moves ahead of the Federal Reserve’s upcoming interest rate decision.
Looking ahead, the latest US durable goods orders report is due today. A forecast rebound in order growth could lend support to the ‘greenback’.
Canadian dollar (CAD) softens as oil prices slide
The Canadian dollar (CAD) struggled on Monday, pressured by declining oil prices, which reduced the appeal of the commodity-linked currency.
With no significant domestic data scheduled, CAD movement will likely remain tied to fluctuations in oil prices.
Australian dollar (AUD) dips on weak business confidence
The Australian dollar (AUD) fell in overnight trade as Australia’s business confidence index stayed in negative territory for the second consecutive month, disappointing markets.
New Zealand dollar (NZD) slips on subdued risk appetite
The New Zealand dollar (NZD) also faced headwinds in overnight trade as renewed demand for the US dollar dampened risk sentiment, weighing on the currency.