Pound (GBP) supported by prospects of closer UK-EU ties
The pound (GBP) finished last week on a firmer footing, consolidating much of the progress made earlier in the session.
Sterling continued to draw support from Prime Minister Andy Burnham’s recent comments about rebuilding relations with the EU, including his suggestion that the UK could ultimately go ‘all the way’ and seek to rejoin the bloc.
The release of the UK’s latest services PMI could weigh on Sterling at the start of this week if it confirms that activity slowed in September, particularly with the GBP calendar otherwise looking quiet.
Euro (EUR) slips despite inflation surge
The euro (EUR) came under pressure on Friday despite a sharp acceleration in Eurozone inflation, which climbed to its highest level in three years during September.
Headline inflation rose to 3.8%, exceeding expectations, but core inflation remained unchanged at 2.5%. This appeared to reinforce the European Central Bank’s (ECB) view that the recent energy shock has yet to generate significant second-round effects, giving policymakers scope to leave rates unchanged again this month.
The euro faces renewed pressure this morning, as concerns over France’s increasingly heavy debt burden intensify.
US dollar (USD) weakens after payrolls miss forecasts
The US dollar (USD) retreated towards the end of last week after the latest US non-farm payroll report fell well short of expectations.
US employers added just 29,000 jobs in September, compared with forecasts for an increase of 90,000, effectively wiping out expectations of a Federal Reserve rate hike this month.
The latest ISM services PMI could provide the ‘greenback’ with some support at the start of this week if it points to continued strength across the US private sector.
Canadian dollar (CAD) pressured as crude falls below $100
The Canadian dollar (CAD) ended last week on weaker footing as Brent crude prices slipped back beneath the $100-per-barrel mark.
The ‘loonie’ is likely to remain closely tied to movements in the oil market as the new week begins, leaving the currency vulnerable to further losses if crude prices continue their retreat.
Australian dollar (AUD) slips as risk appetite fades
The Australian dollar (AUD) weakened through today’s Asian session as a more cautious market tone reduced appetite for risk-sensitive assets.
New Zealand dollar (NZD) dragged lower by risk-off flows
The New Zealand dollar (NZD) also came under pressure overnight as deteriorating risk appetite weighed on demand for the ‘kiwi’.
Never miss a movement. Create a free account with TorFX to get the latest currency news delivered straight to your inbox. You can also set up rate alerts and check live rates 24/7.