Pound (GBP) mixed after Makerfield by-election result
The pound (GBP) experienced mixed fortunes at the end of last week after Andy Burnham’s commanding victory in the Makerfield by-election strengthened his position as a potential challenger to Prime Minister Keir Starmer for the Labour leadership.
Although the outcome prompted a notable jump in UK gilt yields, Sterling found support from a far stronger-than-anticipated recovery in domestic retail sales in May.
Looking ahead, Starmer is expected to confirm his resignation later today, a development that could pressure the pound if it results in a further rise in UK borrowing costs.
Euro (EUR) subdued by softer German producer inflation
The euro (EUR) traded without clear direction on Friday after Germany published weaker-than-expected producer price data.
Monthly figures for May revealed a marked slowdown in factory-gate inflation, indicating that price pressures in the Eurozone’s largest economy may be easing and reducing expectations of additional European Central Bank (ECB) policy tightening.
The latest Eurozone consumer confidence report is due later today, with any improvement in sentiment potentially providing modest support for the single currency.
US dollar (USD) constrained by holiday-thinned markets
The US dollar (USD) initially gained ground on Friday after the sudden cancellation of technical negotiations between the US and Iran unsettled investors.
However, the ‘greenback’ struggled to build on these gains as the Juneteenth market closure in the US reduced liquidity and curtailed trading activity.
At the start of this week, unless there are further disruptions to Middle East peace efforts, demand for the safe-haven US dollar may remain somewhat restrained.
Canadian dollar (CAD) slips despite upbeat domestic figures
The Canadian dollar (CAD) ended last week on the back foot as stronger-than-expected retail sales data failed to improve investor sentiment.
Looking ahead, Canada’s latest inflation release could support the ‘loonie’ today if another rise in price pressures strengthens expectations for a Bank of Canada (BoC) interest rate hike later this year.
Australian dollar (AUD) trapped in narrow range
The Australian dollar (AUD) moved sideways during today’s Asian trading session as a cautious market backdrop limited appetite for the risk-sensitive currency.
New Zealand dollar (NZD) muted amid investor caution
The New Zealand dollar (NZD) also remained rangebound overnight as traders adopted a wait-and-see approach amid ongoing market uncertainty.
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