Australian Dollar (AUD) Pressured by Negative Risk Sentiment
The Australian Dollar (AUD) tumbled at the end of last week as a jittery market mood saw investors shy away from risk-sensitive currencies like the ‘Aussie’.
Market sentiment soured as Israeli security officials signalled they were ready to launch a ground offensive in Gaza, in a move which would mark a sharp escalation of the conflict.
Looking ahead, assuming that risk-appetite remains broadly downbeat, the Australian Dollar is likely to struggle to gain momentum at the start of this week.
New Zealand Dollar (NZD) Slips in Bearish Trade
The New Zealand Dollar (NZD) also slipped on Friday, as the currency was pressured by both uncertainty on the international stage as well as domestic politics.
Turning to this week, the ‘Kiwi’ may face further headwinds as risk-sentiment is likely to remain in the doldrums.
Pound (GBP) Pressured by Slump in Retail Sales
The Pound (GBP) closed last week on a sour note, following the publication of the UK’s latest retail sales figures.
September’s figures reported a whopping 0.9% contraction in sales growth, reviving UK recession fears and sapping Sterling sentiment.
In the absence of any notable UK data, the Pound may be left directionless at the start of this week’s session.
Euro (EUR) Bolstered by Risk-Off Demand
The Euro (EUR) strengthened on Friday as fears of an escalation of the conflict between Israel and Hamas saw investors favour safe-haven assets.
However, the upside in the single currency was tempered slightly by Germany’s latest producer price index as it reported an unexpected fall in prices last month.
Coming up later this week is the European Central Bank’s (ECB) latest interest rate decision. Will caution ahead of the meeting limit movement in the Euro in the first half of this week?
US Dollar (USD) Fluctuates as US Treasury Yields Retreat
The US Dollar (USD) was pulled in two directions at the end of last week. USD exchange rates initially firmed as growing geopolitical uncertainty bolstered safe-haven demand.
However, the ‘Greenback’ struggled to maintain these gains later in the session amid falling US Treasury yields.
Meanwhile, the US Dollar may strengthen at the start of this week as a lull in data leaves the situation in the Middle East to continue to weigh on market sentiment.
Canadian Dollar (CAD) Buoyed by Rising Oil Prices
The Canadian Dollar (CAD) firmed on Friday as the appeal of the oil-sensitive currency was bolstered by an uptick in crude prices.
Looking ahead, movement in the ‘Loonie’ is likely to remain tied to oil price dynamics at the start of this week, potentially allowing CAD exchange rates to strengthen if prices continue to rise.