Pound (GBP) subdued as UK consumer spending plunges
The pound (GBP) struggled to attract demand at the end of last week after the UK reported a substantial decline in retail sales in July, despite support from the World Cup and warmer weather.
Sterling sentiment was further weakened by the UK’s latest borrowing figures, which revealed the government unexpectedly recorded a deficit last month.
Notable UK economic releases are scarce this week, potentially leaving the pound without a strong directional catalyst through the opening sessions.
Euro (EUR) muted as risk appetite improves
The euro (EUR) traded without a clear direction on Friday as stronger risk appetite reduced demand for the single currency’s safe-haven qualities.
This prevented the euro from making meaningful gains, even after the Eurozone’s latest PMIs revealed an unexpected acceleration in private-sector growth this month.
Eurozone data remains limited today, which could leave the euro confined to a narrow range at the beginning of the week.
US dollar (USD) remains under pressure from Treasury buybacks
The US dollar (USD) fell to fresh multi-month lows at the end of last week as the persistent selling pressure on the currency showed little sign of easing.
Although the latest US PMIs exceeded expectations, the figures failed to calm concerns surrounding the US Treasury’s new bond buyback programme.
With few fresh catalysts on the horizon, could lingering US debt concerns drive another round of USD selling today?
Canadian dollar (CAD) lifted by higher oil prices
The Canadian dollar (CAD) edged higher on Friday as rising oil prices supported the commodity-linked currency and helped offset weaker-than-expected domestic retail sales figures.
The ‘loonie’ looks set to face significant pressure today after the US announced fresh 50% tariffs on Canadian imports following the collapse of trade negotiations shortly before the weekend.
Australian dollar (AUD) subdued in cautious trade
The Australian dollar (AUD) struggled to gain traction through Monday’s Asian session as uncertainty surrounding the US-Canada trade dispute reduced demand for risk-sensitive assets.
New Zealand dollar (NZD) rangebound as caution returns
The New Zealand dollar (NZD) also remained subdued in overnight trade as deteriorating market risk appetite encouraged investors to adopt a more cautious stance.
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