Australian dollar (AUD) climbs in positive risk trade
The Australian dollar (AUD) appreciated at the end of last week, amid a positive shift in investor risk appetite.
The risk-on sentiment was underpinned by broad weakness in the US dollar (USD), ahead of the latest US payroll figures.
Turning to the start of this week, the focus for AUD investors will be on China’s latest trade data. Economists forecast imports to China will have slowed in August, which could drag on the ‘Aussie’.
New Zealand dollar (NZD) lifted by risk-on mood
Trade in the New Zealand dollar (NZD) also benefited from the positive risk sentiment on Friday, which helped propel the currency higher against the majority of its peers.
NZD movement may remain closely linked to market risk dynamics today, with the ‘kiwi’ likely to slip if sentiment weakens.
Pound (GBP) muted on mixed retail sales data
The pound (GBP) remained largely subdued on Friday following the uneven UK retail sales data released by the Office for National Statistics (ONS).
While sales growth beat expectations to rise 0.6% in July, downward revisions to historical data through the first half of 2025 raised fresh concern over the UK’s economic trajectory as well as the accuracy of ONS data.
UK economic releases are thin on the ground at the start of this week, which may leave the pound at the mercy of wider market trends.
Euro (EUR) undermined by lacklustre German industrial data
The euro (EUR) faced headwinds on Friday after Germany reported a startling 2.9% drop in factory orders in July.
However, the resulting weakness in the single currency was modest, as the single currency was simultaneously strengthened by its negative correlation with the US dollar.
Germany will publish its latest industrial production figures later today. Expect the euro to retreat if they disappoint similarly to the factory orders release.
US dollar (USD) plummets on abysmal payroll report
The US dollar came under significant selling pressure at the end of last week on the back of a dire US payroll report.
Friday’s data reported the US economy added just 22,000 jobs in August, stoking bets for at least 75 basis points of easing from the Federal Reserve by the end of the year.
With US data in short supply today, USD investors will be left to digest Friday’s payroll print, potentially exposing the US dollar to further losses.
Canadian dollar (CAD) slides amid rising unemployment
The Canadian dollar (CAD) also slumped on Friday as Canada’s own jobs data reported unemployment jumped to a four-year high last month.
In the absence of any notable CAD data, movement in the ‘loonie’ may be primarily driven by oil price dynamics today. If prices continue to soften, the Canadian dollar may stumble.
Data releases
16:00 EUR German Industrial Production (Aug)