Pound (GBP) subdued following comments from BoE’s Pill
The pound (GBP) struggled to gain traction towards the end of last week after comments from Bank of England (BoE) Chief Economist Huw Pill.
Pill described Thursday’s interest rate increase as a pre-emptive move, while cautioning that the bank was unlikely to repeat the aggressive tightening cycle seen in 2022.
Looking ahead, the pound may take direction from a speech by BoE Governor Andrew Bailey today. Sterling could come under renewed pressure if Bailey also seeks to temper more aggressive expectations of further monetary tightening.
Euro (EUR) pressured by US dollar strength
The euro (EUR) struggled to make headway on Friday, with its negative correlation with the US dollar (USD) limiting demand for the single currency.
This offset the release of Germany’s latest industrial production figures, which exceeded expectations and might otherwise have provided a lift to EUR.
Germany’s latest trade data is due at the start of this week, with a stronger-than-anticipated recovery in export growth potentially offering some support to the euro.
US dollar (USD) rallies as AI selloff fuels safe-haven demand
The US dollar ended last week on a strong note, as a widespread selloff in AI stocks unsettled financial markets and prompted investors to seek out safe-haven assets.
The ‘greenback’ then extended its gains following the latest US non-farm payrolls report, which revealed that employment growth significantly exceeded forecasts in October, reinforcing expectations of a Federal Reserve interest rate hike in December.
However, the dollar has already surrendered some of this advance at the beginning of the new week, as investors look to lock in recent profits.
Canadian dollar (CAD) holds steady despite weak jobs data
The Canadian dollar (CAD) proved surprisingly resilient on Friday, holding broadly steady against its major counterparts despite an increase in the domestic unemployment rate.
Nevertheless, the ‘loonie’ could find it harder to maintain its footing this week if oil prices continue to lose ground.
Australian dollar (AUD) supported by improving risk appetite
The Australian dollar (AUD) edged higher during Monday’s Asian session, as weakness in the US dollar helped encourage demand for risk-sensitive currencies.
New Zealand dollar (NZD) advances as election picture becomes clearer
The New Zealand dollar (NZD) began the week on a positive footing, with early results from the weekend’s general election suggesting the incumbent coalition may have managed to secure a narrow parliamentary majority.
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