Pound (GBP) surges on standout PMI reading
The pound (GBP) ended last week’s session on a strong footing, and is currently trading at a six-month high against the US Dollar (USD) after UK services sector growth exceeded expectations this month.
January’s flash services PMI climbed to its highest level since April 2024 and, alongside an unexpectedly robust retail sales reading for December, helped calm recent concerns over the UK’s economic outlook.
With little UK data scheduled for release today, residual optimism around the domestic economy could continue to lend support to Sterling sentiment.
Euro (EUR) drifts lower as PMI data underwhelms
The euro (EUR) edged down against most of its peers on Friday after the Eurozone’s latest PMI releases fell short of market hopes.
Private sector activity across the bloc expanded only marginally in January, with the composite PMI stuck at 51.5.
That said, the single currency may find an opportunity to recover at the start of this week if Germany’s upcoming IFO business climate survey signals an improvement in confidence.
US dollar (USD) deepens decline
The US dollar (USD) selling bias remained entrenched on Friday, with the currency sliding to fresh multi-month lows.
Market confidence in the ‘greenback’ continues to erode as US President Donald Trump’s confrontational foreign policy stance increasingly unsettles investors.
Looking ahead, the US dollar could see some early-week support if November’s durable goods orders data points to a rebound in demand.
Canadian dollar (CAD) gains capped by weak retail figures
The Canadian dollar (CAD) advanced on Friday amid firmer oil prices, though upside was limited by an unexpected drop in domestic retail sales in December.
Should oil prices remain elevated, the ‘loonie’ may be able to extend its gains through today’s session.
Australian dollar (AUD) steady in cautious trade
The Australian dollar (AUD) traded within a tight range during Monday’s Asian session, with the risk-sensitive currency losing favour as market sentiment deteriorated.
New Zealand dollar (NZD) pressured by risk aversion
The New Zealand dollar (NZD) also struggled in overnight trade as a worsening risk backdrop weighed on demand.
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