Pound (GBP) supported by brighter productivity outlook
The pound (GBP) found modest support yesterday amid reports suggesting UK productivity may be stronger than official data indicates.
Analysis from the Resolution Foundation thinktank suggests the UK has emerged from its recent productivity slump, potentially providing a stronger platform for economic growth in the years ahead.
UK data remains relatively sparse today, likely leaving movement in the pound to be dictated by broader currency market trends.
Euro (EUR) subdued amid data drought
The euro (EUR) struggled on Monday as a lack of fresh Eurozone economic releases left the single currency short of a clear catalyst.
EUR sentiment was further weakened by its strong inverse relationship with the US dollar (USD), which edged higher through the session.
Looking ahead, the euro could find some support later today if Germany’s latest IFO survey reveals that business confidence continued to strengthen this month.
US dollar (USD) firms amid Iran sanctions uncertainty
The US dollar edged higher at the beginning of this week, allowing the ‘greenback’ to recover a small part of the losses recorded last week.
Demand for the safe-haven currency increased after US Treasury Secretary Scott Bessent outlined fresh economic sanctions against Iran.
The US dollar could extend its gains today amid renewed trade tensions after China – a key trading partner of Iran – responded to the measures by saying it would ‘do what was necessary’ to safeguard its interests.
Canadian dollar (CAD) tumbles as US imposes tariffs on Canada
The Canadian dollar (CAD) came under heavy selling pressure on Monday as Ottawa pledged retaliatory measures against new US tariffs on Canadian imports.
The ‘loonie’ may remain under pressure today amid mounting concerns about the potential economic damage caused by an escalating US-Canada trade dispute.
Australian dollar (AUD) supported by hawkish RBA minutes
The Australian dollar (AUD) attracted some short-lived support overnight on Monday after minutes from the Reserve Bank of Australia’s (RBA) latest policy meeting struck a hawkish tone.
New Zealand dollar (NZD) pressured by risk aversion
The New Zealand dollar (NZD) edged lower in overnight trade as fresh geopolitical uncertainty weighed on broader market risk appetite.
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