Pound (GBP) weakens as Burnham pushes back on cabinet speculation
The pound (GBP) came under pressure at the close of last week after Andy Burnham delivered his first speech as Labour leader.
Although Burnham sought to reassure markets with a pro-growth message, investors were left underwhelmed after he dismissed speculation that Shabana Mahmood would become Chancellor, insisting no final decisions had yet been made regarding his senior ministerial appointments.
Burnham’s first full day as Prime Minister is expected to centre on the announcement of his cabinet, with any unexpected appointments likely to inject fresh volatility into Sterling during today’s session.
Euro (EUR) upside limited by USD strength
The euro (EUR) edged higher on Friday, finding support as a more cautious market mood favoured the single currency.
However, EUR’s advance remained modest amid the single currency’s negative correlation with the US dollar (USD).
Attention now turns to Germany’s latest producer price index, with softer factory gate inflation expected to weigh on the euro today by further reducing expectations ahead of this week’s European Central Bank (ECB) interest rate decision.
US dollar (USD) climbs as market sentiment deteriorates
The US dollar strengthened through Friday’s trading session as a broad-based equity selloff increased demand for traditional safe-haven assets.
Additional support came after the University of Michigan’s latest survey reported a larger-than-forecast improvement in US consumer confidence this month.
With no major US economic releases scheduled, the US dollar is likely to remain driven by geopolitical developments at the start of this week, potentially extending its recent gains as tensions in the Middle East continue to intensify.
Canadian dollar (CAD) supported by higher crude prices
The Canadian dollar (CAD) advanced on Friday as rising oil prices increased demand for the commodity-linked currency.
Looking ahead, Canada’s latest consumer price index could pressure the ‘loonie’ later today if easing inflation strengthens expectations that the Bank of Canada (BoC) will remain on hold while other major central banks continue tightening policy.
Australian dollar (AUD) rises despite geopolitical concerns
Despite a sluggish start, the Australian dollar (AUD) moved higher during Monday’s Asian session, shrugging off the impact of mounting tensions in the Middle East.
New Zealand dollar (NZD) brushes off weaker trade figures
The New Zealand dollar (NZD) also posted modest overnight gains, with the ‘kiwi’ showing little reaction to data revealing a smaller-than-expected trade surplus last month.
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