Pound (GBP) slips as UK growth stalls
The pound (GBP) ended last week under pressure after the UK’s latest GDP figures showed the economy flatlined in July.
News of stagnant growth at the start of the third quarter weighed on Sterling, fuelling concerns it will be harder for Chancellor Rachel Reeves to plug the hole in public finances without resorting to notable tax rises in her upcoming budget.
Looking forward, with a busy week of UK economic releases and the Bank of England’s (BoE) latest interest rate decision, GBP investors may hold off from making any aggressive moves today.
Euro (EUR) muted on renewed security worries
The euro (EUR) traded without clear direction on Friday as market sentiment was unsettled by renewed European security fears, after Russian drones crossed into Polish territory earlier in the week.
Poland rejected claims the drone activity was accidental, while Moscow insisted peace talks with Ukraine remain ‘on hold’ as the EU prepared to impose further sanctions on Russia.
Without any significant Eurozone data to drive movement, the euro’s performance at the start of this week is likely to be shaped by wider market trends.
US dollar (USD) advance curbed by weaker sentiment
The US dollar (USD) gained ground towards the end of last week, with investors flocking to the safe-haven currency.
However, the dollar pared back some of these gains before the weekend after the University of Michigan’s consumer sentiment survey revealed a sharper-than-expected drop in confidence.
At the start of this week, USD movement could remain limited as investors look ahead to Wednesday’s pivotal Federal Reserve rate decision.
Canadian dollar (CAD) steadied by stronger crude
The Canadian dollar (CAD) held its ground on Friday, supported by an uptick in oil prices after the EU confirmed plans to halt Russian energy imports.
The loonie is likely to continue tracking oil market trends into this week, with further gains in crude potentially lifting CAD demand.
Australian dollar (AUD) lifted as dollar weakens
The Australian dollar (AUD) climbed in overnight trade on Monday, benefitting from softer US dollar demand which spurred risk appetite, despite disappointing economic news out of China.
New Zealand dollar (NZD) strengthened by upbeat mood
The New Zealand dollar (NZD) also pushed higher overnight, buoyed by the broader risk-on tone.
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