Pound (GBP) climbs on prospects of closer UK-EU relations
The pound (GBP) strengthened against most of its major peers at the start of this week, as renewed optimism over the future of UK-EU relations lent support to Sterling.
The move followed comments from Prime Minister Andy Burnham, who argued that ruling out closer ties with the European Union would represent a ‘dereliction of duty’.
Sterling could extend its advance today after the International Monetary Fund (IMF) raised its growth forecast for the UK in 2026.
Euro (EUR) extends losses amid French debt concerns
The euro (EUR) remained under pressure on Monday, with France’s worsening debt situation continuing to weigh on the single currency.
French borrowing costs climbed further during the session as investors questioned whether the government could secure parliamentary approval for its proposed €43bn in spending reductions.
Debate on the government’s budget is due to get underway in France’s parliament later today, and further resistance to the proposed fiscal measures could leave the euro facing additional losses.
US dollar (USD) supported by renewed geopolitical tensions
The US dollar (USD) began the week on a firmer footing, as rising uncertainty encouraged investors to seek out safe-haven assets.
Demand for the ‘greenback’ was supported by fresh concerns surrounding energy shipments through the Red Sea, alongside growing doubts over the fragile energy ceasefire between Russia and Ukraine.
However, an improvement in broader market sentiment could make it harder for the US dollar to sustain its upward momentum during today’s session.
Canadian dollar (CAD) lifted by oil price rally
The Canadian dollar (CAD) gained ground on Monday as a sharp increase in global oil prices pushed crude to its highest level in two weeks.
However, a retreat in energy prices this morning could strip away some of this support, potentially leaving the ‘loonie’ vulnerable to a pullback.
Australian dollar (AUD) rises after RBA meeting minutes
The Australian dollar (AUD) moved higher in overnight trade after the minutes from the Reserve Bank of Australia’s (RBA) September meeting indicated that further interest rate increases remained a possibility.
New Zealand dollar (NZD) supported by improving risk appetite
The New Zealand dollar (NZD) also made gains overnight on Monday, benefiting from a more upbeat mood across financial markets and increased appetite for risk-sensitive currencies.
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