Australian dollar (AUD) suppressed by cautious mood
The Australian dollar (AUD) was muted on Friday amid a dearth of domestic data and a mixed market mood.
This was linked to growing uncertainty over US President Donald Trump’s tariff plans ahead of his 9 July deadline.
Trump’s tariff deadline looms large at the start of this week, and the resulting jitters could continue to undermine market risk appetite in the coming days, further limiting demand for the ‘Aussie’.
New Zealand dollar (NZD) slips in risk-off trade
The New Zealand dollar (NZD) also faltered at the end of last week as investors sought to exercise caution.
Expect the ‘kiwi’ to remain on the defensive through the start of this week as risk sentiment is likely to remain downbeat.
Pound (GBP) stumbles as UK economy faces ‘formidable’ challenges
The pound (GBP) faced headwinds at the end of last week amid fresh concerns over the pressures facing the UK economy.
Credit rating agency S&P Global warned that the recent setback to the government’s welfare reforms highlights the ‘formidable’ challenges it faces trying to balance the books.
UK economic releases are in short supply at the start of this week, likely leaving the movement of the pound to be dictated by wider market trends.
Euro (EUR) buoyed by Lagarde comments
The euro (EUR) trended broadly higher on Friday, with the single currency supported by hawkish remarks from European Central Bank (ECB) President Christine Lagarde.
However, these gains were tempered by Germany’s report of a much larger-than-expected contraction in factory orders in May.
Today sees the release of the Eurozone’s latest retail sales figures. If sales growth contracted as forecast in May, it will likely drag the euro lower.
US dollar (USD) firms despite US holiday
The US dollar (USD) closed last week’s session on a positive note as the cautious market mood saw investors favour the safe-haven currency.
The US dollar’s upside potential ultimately remained limited in scope amid thin trading conditions in the currency as US markets closed for Independence Day celebrations.
Coming up, a renewed focus on Trump’s tariffs could place fresh pressure on the US dollar today, depending on progress in last-minute talks with US trade partners.
Canadian dollar (CAD) slides as oil prices soften
The Canadian dollar (CAD) ticked lower on Friday as a weakening of oil prices reflected negatively on the commodity-linked currency.
US trade jitters could place oil prices under even more pressure through today’s session, potentially leading to further weakness in the ‘loonie’.
Data releases
16:00 EUR German Industrial Production (May)
19:00 EUR Retail Sales (Jun)