Pound (GBP) steady after cabinet changes
The pound (GBP) held firm on Monday as markets reacted to Prime Minister Keir Starmer’s cabinet reshuffle following Deputy Prime Minister Angela Rayner’s exit late last week.
Investors appeared largely unfazed by the shake-up, with reassurance coming from Rachel Reeves’ retention as Chancellor, which helped to limit volatility in UK gilts.
Attention today will turn to comments from the Bank of England’s (BoE) Sarah Breeden. Any dovish messaging from the Deputy Governor for Financial Stability could weigh on Sterling sentiment.
Euro (EUR) weighed down by French political turmoil
The euro (EUR) struggled for support on Monday after France was thrown into fresh political uncertainty when Prime Minister Francois Bayrou lost his self-imposed confidence vote.
This overshadowed the single currency’s negative correlation with the US dollar (USD), which might otherwise have lent the euro support yesterday.
Looking ahead, French political uncertainty may weigh on the euro through the coming session.
US dollar (USD) slides as payroll fallout lingers
The US dollar extended its decline on Monday as investors continued to digest Friday’s dismal jobs report.
Growing speculation that the Federal Reserve could deliver a 50-basis-point cut this month fuelled the ongoing bearish sentiment surrounding the greenback.
Later today, focus will fall on the annual payroll revision. Forecasts suggest a possible downgrade of up to 800,000 jobs, which may add to the pressure facing the US dollar.
Canadian dollar (CAD) boosted by stronger oil prices
The Canadian dollar (CAD) advanced at the start of the week as a rebound in crude prices bolstered the commodity-sensitive currency.
With no notable Canadian releases scheduled, the ‘loonie’ is likely to remain largely driven by oil market developments today.
Australian dollar (AUD) edges higher despite weaker confidence
The Australian dollar (AUD) gained ground in overnight trade, supported by improved global risk sentiment, even as domestic surveys pointed to softening consumer and business morale.
New Zealand dollar (NZD) flat as growth concerns linger
The New Zealand dollar (NZD) moved sideways on Monday night, with rising doubts over the country’s economic resilience limiting appetite for the ‘kiwi’.
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