Pound (GBP) lifted by hopes of closer EU ties
The pound (GBP) moved higher against most of its peers yesterday, buoyed by optimism surrounding potential closer alignment between the UK and the EU’s single market.
Plans under consideration would allow the UK to implement new EU rules without requiring a full parliamentary vote each time, with investors hopeful this could reduce trade friction with the bloc.
GBP investors will turn their focus to remarks from Andrew Bailey, Governor of the Bank of England (BoE), for fresh direction today, with Sterling at risk of slipping if he challenges current expectations for higher UK interest rates.
Euro (EUR) steady as Hungary vote boosts sentiment
The euro (EUR) held firm on Monday, supported by cautious optimism within the EU following Victor Orban’s defeat in Hungary’s general election.
His successor, Peter Magyar, has already indicated a willingness to strengthen ties with the EU and reduce Hungary’s resistance to key policy decisions.
With little in the way of Eurozone data, broader market sentiment is likely to drive movement in the euro today.
US dollar (USD) mixed amid Middle East uncertainty
The US dollar (USD) initially strengthened yesterday as investors sought safety after US-Iran peace negotiations collapsed over the weekend.
However, demand for the safe-haven currency later eased after US President Donald Trump suggested Iran ‘wants to work a deal’, keeping the possibility of diplomacy alive.
The US dollar remains under pressure this morning, with reports indicating the US and Iran may be preparing for a second round of talks.
Canadian dollar (CAD) supported by oil rebound
The Canadian dollar (CAD) edged higher on Monday as oil prices briefly climbed back above $100 per barrel.
Looking ahead, expectations of renewed peace discussions may weigh on oil prices today, potentially capping gains for the ‘loonie’.
Australian dollar (AUD) pressured by drop in confidence
The Australian dollar (AUD) weakened overnight on Monday after a sharper-than-expected decline in both consumer and business confidence since the onset of the Middle East conflict.
New Zealand dollar (NZD) gains on improved sentiment
The New Zealand dollar (NZD) firmed in overnight trade, supported by a modest recovery in global risk appetite.
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