Pound (GBP) pressured by BoE easing expectations
The pound (GBP) weakened during yesterday’s session, weighed down by growing expectations that the Bank of England (BoE) will implement a 25bps interest rate reduction at its upcoming policy meeting.
Political uncertainty also acted as a drag on Sterling, amid speculation that a potential Labour defeat in next week’s Gorton and Denton by-election could intensify pressure on Prime Minister Keir Starmer’s leadership.
Stronger-than-forecast UK retail sales are offering the pound some support this morning, with additional upside possible should the UK’s services PMI exceed expectations.
Euro (EUR) subdued as confidence data disappoints
The euro (EUR) struggled for direction on Thursday after the release of the Eurozone’s latest consumer confidence reading.
Although sentiment improved slightly this month, the figures failed to meet market expectations, leaving the single currency lacking momentum.
Attention now turns to the Eurozone’s PMI releases, with the euro potentially gaining traction if business activity shows stronger expansion in February.
US dollar (USD) advances on improving labour data
The US dollar (USD) moved higher on Thursday after fresh data pointed to continued strength in the US labour market, with jobless claims declining more than forecast last week.
Safe-haven flows also supported the ‘greenback’, following reports suggesting the US may carry out military action against Iran in the coming days.
Markets will now focus on the latest US GDP figures. With growth forecast to have slowed in the final quarter of 2025 amid the government shutdown, weaker data could trim recent USD gains.
Canadian dollar (CAD) supported by firmer oil prices
The Canadian dollar (CAD) strengthened on Thursday as rising oil prices boosted demand for the commodity-linked currency.
Canada’s upcoming retail sales release may lend further support to the ‘loonie’ if January’s data signals stronger consumer spending momentum.
Australian dollar (AUD) weakens after disappointing PMIs
The Australian dollar (AUD) declined during Friday’s Asian session after Australia’s most recent PMI readings undershot market forecasts.
New Zealand dollar (NZD) weighed down by soft trade figures
The New Zealand dollar (NZD) also slipped in overnight trading following reports of a decline in New Zealand’s export volumes at the beginning of 2026.
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