Pound (GBP) steady as UK bond yields ease
The pound (GBP) traded in a tight range at the beginning of the week as lower energy prices helped ease inflationary pressures in the UK and pushed 10-year gilt yields back beneath the 5% mark.
The decline in borrowing costs was welcomed by Burnham’s new government, as it could provide greater fiscal flexibility to support some of its planned spending measures.
Looking ahead, Sterling may remain rangebound today, with GBP investors reluctant to make bold moves before the Bank of England’s (BoE) interest rate announcement later this week.
Euro (EUR) supported as energy worries fade
The euro (EUR) edged higher on Monday as concerns surrounding Europe’s energy outlook continued to diminish.
The single currency had come under pressure at the end of last week amid fears over winter gas supplies, but renewed optimism surrounding a possible US-Iran ceasefire and potential resumption of Gulf energy exports helped improve sentiment.
With no major Eurozone data scheduled for release today, the euro may struggle to establish a clear direction.
US dollar (USD) softens as Middle East tensions ease
The US dollar (USD) initially came under pressure early this week after signs of reduced tensions in the Middle East fuelled expectations of a renewed US-Iran ceasefire.
However, the ‘greenback’ recovered much of its losses later in the day as the improvement in market sentiment proved short-lived.
Turning to today, the safe-haven US dollar may continue to attract support as a deepening selloff in AI-related shares weighs heavily on global equity markets.
Canadian dollar (CAD) pressured by sharp oil price decline
The Canadian dollar (CAD) began the week on the back foot as optimism over a potential US-Iran peace ceasefire drove oil prices down towards $90 per barrel.
Expect downside pressure on the ‘loonie’ to persist today if crude prices continue to retreat.
Australian dollar (AUD) slips despite hawkish RBA Bullock comments
The Australian dollar (AUD) weakened during overnight trade as a deteriorating market mood overshadowed remarks from Reserve Bank of Australia (RBA) Governor Michelle Bullock, who indicated that further monetary tightening may still be required.
New Zealand dollar (NZD) muted amid cautious market mood
The New Zealand dollar (NZD) also remained under pressure overnight as the ongoing selloff in AI stocks weakened broader market risk appetite.
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