Pound (GBP) rangebound as policymakers send mixed signals
The pound (GBP) traded in a narrow range yesterday, influenced by remarks from Prime Minister Keir Starmer and Bank of England (BoE) Governor Andrew Bailey.
Starmer’s comments suggesting a desire for closer economic cooperation with the EU may have offered Sterling some support. However, this was counterbalanced by Bailey tempering expectations of further interest rate rises.
Looking ahead, a lack of notable UK data may leave GBP without a clear direction again today.
Euro (EUR) supported by softer US dollar
The euro (EUR) advanced against some weaker counterparts yesterday, underpinned by its inverse relationship with a weakening US dollar (USD).
That said, the single currency lost ground against higher-risk peers amid an improvement in market sentiment.
With limited Eurozone data due today, broader market dynamics are likely to be the primary driver of EUR movement.
US dollar (USD) pressured by easing geopolitical tensions
The US dollar declined yesterday as optimism that tensions in the Middle East could de-escalate encouraged investors to move towards riskier assets.
Stronger-than-expected US jobs and retail sales figures helped limit the downside, but not enough to reverse the overall trend.
Today, the ‘greenback’ has regained some ground amid fresh uncertainty surrounding the situation. Continued shifts in risk appetite may drive further volatility in USD.
Canadian dollar (CAD) weakens as oil prices slide
The oil-sensitive Canadian dollar (CAD) came under notable pressure yesterday as crude prices dropped on expectations that Middle East tensions may ease.
However, CAD has clawed back some losses this morning in line with a rebound in oil prices. Further gains in crude could lend the currency additional support today.
Australian dollar (AUD) slips despite strong trade figures
The Australian dollar (AUD) edged lower overnight, even though trade data exceeded expectations, as renewed concerns over the Middle East dampened demand for risk-sensitive currencies.
New Zealand dollar (NZD) retreats amid cautious sentiment
The New Zealand dollar (NZD) also moved lower during the night session, pressured by a more cautious market mood.
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