Pound (GBP) subdued amid data drought
The pound (GBP) lacked clear direction on Friday, with the ongoing absence of significant UK economic releases leaving Sterling without a major catalyst.
GBP investors also appeared largely indifferent to movements in the UK bond market, even as borrowing costs fell back to levels seen before the recent bout of turmoil.
John Healey is set to deliver his first major speech as Chancellor today, with growth expected to feature prominently. A positive market reaction to his remarks could give Sterling a firmer start to the week.
Euro (EUR) pressured by retail sales decline
The euro (EUR) came under modest pressure on Friday, as the latest batch of Eurozone economic data offered a mixed picture.
Although German factory orders beat expectations in July, this was more than offset by an unexpected contraction in Eurozone retail sales during the same month.
The euro could remain under pressure today, following Germany’s latest industrial production figures, which revealed an unexpected decline in factory output in July.
US dollar (USD) supported by payrolls surprise
The US dollar (USD) strengthened towards the end of last week, after the latest US non-farm payroll figures revealed the economy added 162,000 jobs in August, comfortably exceeding forecasts for an increase of 56,000.
The stronger-than-expected figures were welcomed by USD investors, as continued resilience in the US labour market could encourage the Federal Reserve to raise interest rates later this month.
Looking to the beginning of this week, US markets will remain closed for the long Labor Day weekend, with thinner trading conditions potentially limiting demand for the US dollar.
Canadian dollar (CAD) weakens as employment contracts
The Canadian dollar (CAD) fell sharply on Friday, after Canada’s latest employment figures revealed an unexpected contraction in employment growth last month.
The focus for CAD investors is likely to shift back towards oil price movements at the start of this week, potentially supporting the ‘loonie’ as renewed uncertainty in the Middle East has driven crude prices higher.
Australian dollar (AUD) lifted by Chinese stimulus reports
The Australian dollar (AUD) edged higher during Monday’s Asian session, after reports that Beijing plans to inject billions into state-owned insurers and banks provided a boost to the China-sensitive ‘Aussie’.
New Zealand dollar (NZD) subdued amid cautious trading
The New Zealand dollar (NZD) struggled to gain traction in overnight trade, as renewed tensions in the Middle East prompted investors to reduce their exposure to risk-sensitive assets such as the ‘kiwi’.
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