Pound (GBP) fluctuates amid mixed economic signals
The pound (GBP) traded erratically at the end of last week, reacting to a blend of positive and negative UK economic data.
While UK retail sales smashed expectations and February’s preliminary services PMI surpassed forecasts, disappointing tax receipts reignited fears of potential tax hikes or public spending cuts.
GBP investors will turn their attention to speeches from Bank of England (BoE) officials Clare Lombardelli and Dave Ramsden today. A dovish tone could see the pound struggle.
Euro (EUR) subdued by underwhelming PMIs
The euro (EUR) faced downward pressure on Friday as weaker-than-expected PMI figures weighed on sentiment.
Data revealed that Eurozone private sector activity stagnated this month, heightening concerns over the bloc’s economic prospects and reinforcing European Central Bank (ECB) interest rate cut speculation.
However, the euro found support this morning amid relief over the outcome of Germany’s election, with the centre-right CDU/CSU alliance poised to form a grand coalition with the SPD.
US dollar (USD) dips as PMIs disappoint
The US dollar (USD) gained ground early on Friday, benefiting from risk-off flows as investors sought safe-haven assets.
However, the ‘greenback’ later erased these gains after the latest US S&P PMI readings fell well below expectations.
With little high-impact US data due today, USD movement may be influenced by any notable policy updates from Washington.
Canadian dollar (CAD) holds firm despite weaker oil prices
The Canadian dollar (CAD) registered modest gains on Friday, shrugging off a decline in crude oil prices.
Later today, a speech from Bank of Canada (BoC) Deputy Governor Toni Gravelle could apply pressure to the ‘loonie’ if he hints at the need for further monetary easing.
Australian dollar (AUD) lifted by Chinese stimulus hopes
The Australian dollar (AUD) strengthened at the start of the week’s Asian session, buoyed by fresh stimulus plans outlined in China’s 2025 annual policy statement.
New Zealand dollar (NZD) rallies as risk appetite improves
The New Zealand dollar (NZD) also advanced overnight, with the risk-sensitive ‘kiwi’ drawing support from a softer US dollar and improved market sentiment.
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