Pound (GBP) firms on positive retail data
Trade in the pound (GBP) was broadly positive at the end of last week, with Sterling sentiment being buoyed by positive domestic data.
UK retail sales were shown to have risen by 1% month-on-month in February. While this was slower than the 1.4% expansion in January, it smashed forecasts for a 0.3% contraction.
Turning to this week, a lull in UK economic data is likely to see the direction of the pound determined by wider market trends.
Euro (EUR) bolstered by reports of tariff concessions
The euro (EUR) rallied on Friday following reports that the European Commission might be prepared to make concessions to the US to secure a partial removal of US tariffs.
The move helped to ease fears of a damaging transatlantic trade war, much to the relief of EUR investors
Coming up, today sees the publication of Germany's latest consumer price index. If March's preliminary CPI figures report that inflation cooled, it's likely to stoke ECB rate cut bets and drag on the euro.
US dollar (USD) buoyed by rising inflation
The US dollar (USD) edged higher at the end of last week, supported by a surprise acceleration in the Federal Reserve's preferred indicator for inflation, the core PCE price index.
While this trimmed Fed interest rate cut bets, the upside in the 'greenback' was kept in check by ongoing US trade policy uncertainty and fears of a looming recession.
Looking ahead, expect US President Donald Trump's reciprocal tariffs and concerns over their impact on the US economy to drive movement in the US dollar through the first half of this week.
Canadian dollar (CAD) muted as Canada's economy stalls
The Canadian dollar (CAD) was subdued on Friday, in response to data showing that Canadian GDP flatlined in February.
CAD data is in short supply at the start of this week, likely resulting in the 'loonie' trading in tandem with oil price dynamics today.
Australian dollar (AUD) pressured as US tariff loom
The Australian dollar (AUD) trended lower during Monday's Asian trading session as investors turned cautious in advance of Trump's reciprocal tariffs.
New Zealand dollar (NZD) softens in risk-off trade
The New Zealand dollar (NZD) also faltered in overnight trade as the threat of US tariffs weakened market risk appetite.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
