Pound (GBP) edges higher after BoE Pill remarks
The pound (GBP) moved modestly higher at the end of last week, clawing back a portion of Thursday’s declines after comments from Bank of England (BoE) Chief Economist Huw Pill.
Pill cautioned against the BoE ‘drawing too much comfort’ from an anticipated drop in inflation, arguing that much of the slowdown is likely to be driven by one-off factors.
As the new week begins, Sterling could face headwinds from domestic political uncertainty, with Prime Minister Keir Starmer seeking to shore up backing from Labour MPs after a turbulent week that ended with the departure of his closest adviser.
Euro (EUR) pressured by weak German industry data
The euro (EUR) came under pressure on Friday following the publication of disappointing German industrial figures.
Data for December showed industrial production fell by 1.9%, stoking renewed worries over the strength of the Eurozone’s largest economy.
Looking ahead, a lack of major Eurozone releases today could leave the single currency without clear direction.
US dollar (USD) undermined by improving risk sentiment
The US dollar (USD) softened broadly as tentative gains in market risk appetite reduced demand for the safe-haven currency.
This came despite data revealing an unexpected uptick in US consumer confidence this month.
At the start of the week, USD investors may remain cautious ahead of key US jobs and inflation reports, which could influence expectations for a Federal Reserve rate cut in March.
Canadian dollar (CAD) lifted by falling unemployment
The Canadian dollar (CAD) advanced on Friday after data revealed an unexpected decline in domestic unemployment last month.
Looking ahead, the ‘loonie’ could build on these gains if oil prices continue to trend higher at the start of this week.
Australian dollar (AUD) supported by hawkish RBA tone
The Australian dollar (AUD) started the week on a firm footing, rising through Monday’s Asian session after Reserve Bank of Australia (RBA) Governor Michele Bullock hinted that further policy tightening may be required.
New Zealand dollar (NZD) strengthens on risk-positive mood
The New Zealand dollar (NZD) also pushed higher overnight, supported by a cautiously upbeat shift in market sentiment.
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