Pound (GBP) buoyed by strong service sector growth
The pound (GBP) climbed higher yesterday as investors reacted positively to the UK’s latest PMI reports.
Markets were particularly encouraged by a surprise jump in the services PMI, with activity in the dominant sector reaching its highest levels since August.
Later today, the Confederation of British Industry (CBI) will release its distributive trends index. If UK retail sales volumes remain under pressure, Sterling could struggle to hold its gains.
Euro (EUR) pressured as Eurozone PMIs disappoint
The euro (EUR) edged lower on Monday after the Eurozone’s PMI readings came in slightly weaker than expected.
A softer-than-forecast performance in the services sector meant overall private sector growth remained sluggish, stoking speculation that the European Central Bank (ECB) may cut interest rates again next month.
Looking ahead, Germany’s Ifo business climate index is due for release today. If the index rises on hopes that Germany’s fresh spending plans will boost confidence, the euro could find some support.
US dollar (USD) weakens as Trump signals tariff flexibility
The US dollar (USD) struggled for demand at the start of the week as improved risk sentiment sapped appetite for the safe-haven currency.
This shift came after US President Donald Trump suggested the White House may take a ‘flexible’ approach when implementing reciprocal tariffs on 2 April.
If this optimism continues to lift market sentiment, the US dollar may extend its decline through today’s session.
Canadian dollar (CAD) slips amid election uncertainty
The Canadian dollar (CAD) trended lower on Monday as investors reacted to political uncertainty following Prime Minister Mark Carney’s announcement of a snap election for 28 April.
With no major Canadian data due today, the ‘loonie’ may remain vulnerable to shifting political sentiment and oil price fluctuations.
Australian dollar (AUD) rises on budget optimism
The Australian dollar (AUD) continued to climb overnight on Monday, supported by growing confidence ahead of Australia’s upcoming federal budget.
New Zealand dollar (NZD) struggles as risk appetite fades
The New Zealand dollar (NZD) faced headwinds in overnight trade as waning market sentiment limited demand for the risk-sensitive currency.
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