Australian dollar (AUD) slides in risk-averse trade
The Australian dollar (AUD) was pressured at the end of last week’s session as cautious investor sentiment undermined the appeal of the risk-sensitive currency.
The mood deteriorated as US President Donald Trump rattled markets with the announcement of new tariff measures targeting pharmaceuticals, trucks, and interior fittings.
Expect the downside in the ‘Aussie’ to persist if this risk aversion carries over into the start of this week.
New Zealand dollar (NZD) slides amid soft consumer sentiment
The New Zealand dollar (NZD) faced similar pressure on Friday, as the cautious market mood, coupled with weaker-than-expected domestic consumer confidence figures, dragged on the ‘kiwi’.
Likewise, NZD exchange rates remain vulnerable at the start of this week’s session if a risk-off mood continues to prevail.
Pound (GBP) underpinned by BoE divergence
The pound (GBP) outperformed most of its peers at the end of last week, recouping some of its losses from earlier in the session.
This recovery came amid suggestions that Sterling’s recent weakness was overdone, particularly in light of expected Bank of England (BoE) policy divergence with the Federal Reserve and other major central banks.
The BoE will publish its latest consumer credit report later today. GBP investors will be seeking more insight into consumer spending habits and their potential impact on economic growth in the coming months.
Euro (EUR) supported by USD weakness
The euro (EUR) firmed during Friday’s trading session as the single currency benefitted from its negative correlation with the US dollar (USD).
However, these gains remained limited in scope, as the renewed tensions between Russia and Europe kept EUR investors on edge.
Coming up, the release of the Eurozone’s latest economic sentiment index could act as a headwind for the euro today, if morale continued to deteriorate this month.
US dollar (USD) slips as inflation holds steady
The US dollar ticked lower at the end of last week following the publication of the Federal Reserve’s preferred inflation indicator, the core PCE price index.
August’s data printed in line with expectations, showing that inflation held at 2.9% year-on-year and dampening the recent hawkish tilt to Fed interest rate expectations.
US economic releases are in short supply today, which may see the fallout from Trump’s latest tariff announcements continue to influence USD sentiment.
Canadian dollar (CAD) subdued as GDP stalls
The Canadian dollar (CAD) struggled to attract support on Friday after Canada’s latest GDP figures showed that the Canadian economy stalled in August.
Turning to the start of this week, a lull in notable CAD data is likely to see the ‘loonie’ move in tandem with oil prices.
Data Releases
18:30 GBP BoE Consumer Credit (Aug)
19:00 EUR Economic Sentiment