Pound (GBP) supported by upbeat manufacturing PMI
The pound (GBP) found modest support at the start of this week, following the publication of the UK’s latest manufacturing PMI.
January’s finalised figures saw factory activity revised higher, with the index climbing to its highest levels since August 2024.
With UK economic releases thin on the ground today, the pound may struggle to establish a clear directional bias.
Euro (EUR) slips on weak German retail figures
The euro (EUR) edged lower on Monday as underwhelming German retail sales data failed to offset pressure from a firmer US dollar (USD).
Although sales returned to expansion in December, the pace of growth remained subdued, fuelling concerns about the strength of consumer demand in the Eurozone’s largest economy.
Eurozone data remains scarce today, which may leave the euro trading sideways ahead of the bloc’s inflation figures on Wednesday.
US dollar (USD) supported by heightened market volatility
The US dollar opened the week on a firm footing, building on the rebound seen late last week.
This strength was partly driven by turbulence across equity and commodity markets, boosting safe-haven demand, with the move reinforced by an unexpected improvement in the ISM manufacturing PMI.
Looking ahead, the latest JOLTs job openings data could cap USD gains later today if it suggests the US labour market cooled in December.
Canadian dollar (CAD) weighed down by oil sell-off
The Canadian dollar (CAD) weakened on Monday after easing tensions between the US and Iran sparked a near 5% slide in oil prices.
The ‘loonie’ may remain under pressure if the pullback in crude prices extends through today’s session.
Australian dollar (AUD) jumps on RBA rate increase
The Australian dollar (AUD) surged in overnight trade on Monday after the Reserve Bank of Australia (RBA) lifted interest rates by 25bps and hinted that further tightening may be required to rein in inflation.
New Zealand dollar (NZD) lifted by commodity rebound
The New Zealand dollar (NZD) also strengthened overnight, supported by its close correlation with the ‘Aussie’ and a recovery in commodity prices.
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