Pound (GBP) slips amid profit-taking
The pound (GBP) edged lower against most rivals at the end of last week, with the currency coming under pressure from modest profit-taking after Thursday’s GDP-inspired gains.
This pullback was likely exacerbated by a sense of caution ahead of today’s UK-EU summit in London.
While the main focus of the summit is a new defence and security agreement, any updates regarding a revised trade framework could influence GBP sentiment. A lack of progress may disappoint investors.
Euro (EUR) pressured by dovish ECB outlook
The euro (EUR) softened on Friday following dovish signals from European Central Bank (ECB) member Martins Kazaks.
Kazaks commented that the ECB may need to implement a few more interest rate cuts, dragging on the single currency.
Looking ahead, the euro could find support today if the UK-EU summit yields signs of improved economic cooperation or trade ties between the two blocs.
US dollar (USD) hampered by weak sentiment data
The US dollar (USD) posted modest gains at the end of last week, although a weaker-than-forecast US consumer sentiment index curbed the currency’s upside potential.
With investor attention currently fixed on consumer sentiment as an indicator of economic resilience, the data cooled appetite for the US dollar, despite broader risk-off sentiment.
This week, the US dollar could face further pressure after Moody’s stripped the US of its AAA credit rating, citing concerns over the growing federal deficit and higher interest costs.
Canadian dollar (CAD) directionless as oil prices stagnate
The Canadian dollar (CAD) was rangebound on Friday, with a lack of economic data and stagnant oil prices leaving the ‘loonie’ rudderless.
CAD exchange rates may remain directionless into the start of this week, with the absence of key releases keeping focus on commodity price trends.
Australian dollar (AUD) drifts ahead of RBA policy call
The Australian dollar (AUD) was subdued in overnight trade, with investors adopting a cautious stance before the Reserve Bank of Australia’s (RBA) upcoming interest rate announcement.
New Zealand dollar (NZD) steady amid mixed mood
The New Zealand dollar (NZD) held steady through Monday’s Asian session as mixed risk sentiment kept the currency in a holding pattern.
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