Pound (GBP) mixed amid absence of data
The pound (GBP) lacked a clear direction on Friday, with a dearth of UK economic data leaving Sterling adrift.
Instead, GBP was largely influenced by broader market dynamics, with Sterling strengthening against certain peers while slipping against risk-sensitive rivals.
Looking ahead, Bank of England (BoE) policymaker Catherine Mann’s speech this evening could inject volatility into GBP trade. Any hawkish signals may provide the pound with a boost.
Euro (EUR) recovers as USD weakens
The euro (EUR) initially struggled on Friday as heightened Russia-Ukraine tensions dented optimism surrounding potential peace progress.
However, a sharp downturn in the US dollar (USD) later in the session allowed the euro to rebound, given the currency’s negative correlation with the ‘greenback’.
Political turbulence in France looms over the single currency today, with Prime Minister François Bayrou facing the prospect of a confidence vote next month. This ongoing uncertainty may keep pressure on EUR in the near term.
US dollar (USD) plunges as Fed Chair signals easing
The US dollar traded sideways for much of Friday as markets waited for Federal Reserve Chair Jerome Powell’s Jackson Hole speech.
Once delivered, however, the ‘greenback’ sank sharply as Powell hinted at the possibility of a coming rate cut, reinforcing expectations of looser monetary policy and undermining USD demand.
Despite these losses, the dollar has regained some ground this week, even as concerns mount over President Donald Trump’s efforts to dismiss Fed Governor Lisa Cook. Later today, a forecast decline in durable goods orders could see fresh headwinds for USD.
Canadian dollar (CAD) pressured by USD weakness
The Canadian dollar (CAD) was lifted initially on Friday by climbing oil prices. However the currency later fell back, dragged lower by its positive correlation with the struggling US dollar.
With little domestic data scheduled today, CAD’s performance may be dictated by energy market movements. A pullback in oil prices could weigh heavily on the ‘loonie’.
Australian dollar (AUD) muted after RBA minutes
The Australian dollar (AUD) remained subdued overnight, with traders digesting the Reserve Bank of Australia’s (RBA) latest meeting minutes. While the RBA signalled that more rate cuts could be required, uncertainty over the pace of policy easing kept AUD restrained.
New Zealand dollar (NZD) dips amid risk aversion
The New Zealand dollar (NZD) softened slightly overnight, with a cautious market mood curbing appetite for the risk-sensitive ‘kiwi’.
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