Pound (GBP) lifted by BoE policy outlook
The pound (GBP) ended last week on a stronger footing, clawing back some of its earlier declines against its major rivals.
Sterling’s rebound was linked to a feeling that its recent weakness was overdone amid the expected policy divergence between the Bank of England (BoE) and other leading central banks, including the Federal Reserve.
Later today the BoE will release its consumer credit data. Traders will be assessing whether borrowing trends suggest a resilient or weakening outlook for UK consumption.
Euro (EUR) steadies on softer US dollar
The euro (EUR) gained ground on Friday, with the single currency supported by its inverse relationship with the US dollar (USD).
That said, EUR upside proved modest as heightened geopolitical tensions between Russia and Europe continued to weigh on sentiment.
Looking ahead, the Eurozone’s latest economic sentiment survey could drag on the euro today if confidence slipped further in September.
US dollar (USD) drifts lower as inflation unchanged
The US dollar lost traction at the end of last week following the release of the Fed’s preferred inflation measure, the core PCE price index.
August’s reading matched forecasts at 2.9% year-on-year, which cooled expectations for more aggressive Federal Reserve rate action.
With little US data due today, the market reaction to US President Donald Trump’s recent tariff proposals is likely to remain a key driver of USD trade.
Canadian dollar (CAD) pressured as growth stagnates
The Canadian dollar (CAD) was subdued on Friday after monthly GDP figures confirmed the domestic economy failed to expand in August.
At the start of this week, the absence of fresh Canadian data means oil market fluctuations are likely to dictate movement in the ‘loonie’.
Australian dollar (AUD) supported by upbeat mood
The Australian dollar (AUD) pushed higher overnight, with a weaker US dollar boosting global risk appetite and supporting the currency.
New Zealand dollar (NZD) unsettled by local headwinds
The New Zealand dollar (NZD) traded unevenly through Monday’s Asian session, with lingering concerns over the domestic outlook countering the lift from improved risk sentiment.
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