Pound (GBP) supported by backing for Reeves
The pound (GBP) advanced at the start of the week, as Prime Minister Keir Starmer’s public endorsement of Chancellor Rachel Reeves helped restore some market confidence following last week’s GBP losses.
However, Sterling’s gains were capped by lingering concerns over the UK’s fiscal outlook, following the government’s decision to shelve key welfare reforms.
With no major UK data releases scheduled today, GBP is likely to remain at the mercy of broader market forces.
Euro (EUR) weakens amid trade deal tensions
The euro (EUR) lost ground on Monday, pressured by growing doubts about the EU’s ability to unite behind a trade agreement with the US.
Adding to the pressure was the release of disappointing retail data, which showed Eurozone sales suffered their sharpest fall in nearly two years last month.
All eyes now turn to progress in EU-US trade talks, with the euro likely to strengthen if signs emerge that a compromise deal could win widespread EU support.
US dollar (USD) dips after tariff delay
The US dollar (USD) saw mixed trade at the beginning of the week, rising initially on safe-haven demand and reduced Federal Reserve interest rate cut expectations.
However, the dollar’s momentum faded overnight as President Donald Trump announced another delay to his tariff measures, pushing the deadline to 1 August.
Today, the dollar could face further pressure as markets assess the potential impact of the postponed tariffs on government revenue and fiscal planning.
Canadian dollar (CAD) pressured by trade concerns
The Canadian dollar (CAD) edged lower on Monday as investors grew frustrated with the slow pace of US-Canada trade negotiations.
Looking ahead, the ‘loonie’ may face additional headwinds if Canada’s upcoming Ivey PMI shows continued weakness in private sector activity.
Australian dollar (AUD) jumps on surprise RBA hold
The Australian dollar (AUD) rallied overnight after the Reserve Bank of Australia (RBA) opted to keep interest rates steady, catching some investors off guard and boosting demand for the ‘Aussie’.
New Zealand dollar (NZD) lifts on improving sentiment
The New Zealand dollar (NZD) also climbed during overnight trade, benefitting from a broader uptick in market optimism following Trump’s latest tariff delay.
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