Pound (GBP) subdued amid limited data
The pound (GBP) remained largely rangebound on Friday, with a lack of key UK economic data leaving the currency without much impetus.
Uncertainty surrounding the Bank of England’s (BoE) upcoming interest rate decision also saw GBP investors refrain from making any decisive moves.
With no major UK releases due at the start of this week, the pound could struggle to find direction once again today.
Euro (EUR) pressured by weak German data
The euro (EUR) faced selling pressure at the end of last week after Germany’s latest consumer price index revealed a sharper-than-expected slowdown in inflation.
Adding to the euro’s woes was the release of disappointing German retail sales data on Friday, which indicated a significant drop in consumer spending towards the end of last year.
The euro could face further volatility today with the release of the Eurozone’s CPI figures. If January’s inflation data also undershoots forecasts, EUR exchange rates may continue to weaken.
US dollar (USD) strengthens on renewed Trump tariff threats
The US dollar (USD) closed last week’s session on a strong note, initially firming after President Trump reiterated plans to impose tariffs on Canada and Mexico starting Saturday.
These gains were reinforced by the latest core PCE price index, which showed the Federal Reserve’s preferred inflation gauge remained stubbornly high in December.
Looking ahead, the US ISM manufacturing PMI is due later today. If the report shows that the factory sector remained in contraction last month, it could place some pressure on the ‘greenback’.
Canadian dollar (CAD) wobbles following mixed GDP data
The Canadian dollar (CAD) saw choppy trade on Friday after domestic GDP figures revealed an unexpected contraction in November, followed by a strong rebound in December.
At the start of this week, the ‘loonie’ may face additional challenges after Trump’s new 25% tariffs on Canadian goods took effect over the weekend.
Australian dollar (AUD) weakens on trade concerns
The Australian dollar (AUD) lost ground during Monday’s Asian session as Trump’s tariffs dampened market sentiment, leading to reduced risk appetite.
New Zealand dollar (NZD) hit by worsening market mood
The New Zealand dollar (NZD) also trended lower overnight, pressured by the broader shift towards risk aversion in global markets.
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