Daily Currency Update

USD - US Dollar

The USD's recovery was hindered on Friday due to weaker US data and falling yields, influenced by Fed Chairman Powell's comments, which sparked thoughts of earlier rate cuts. While Powell indicated restrictive policy, his resistance to rule out further tightening was mild, slightly boosting USD. However, with the focus on upcoming US job data and gold prices hitting a record high, the strength of the USD against these factors remains uncertain. This week's job data, especially Friday's NFP, will be crucial in shaping USD's trajectory into the holidays. Strong data is essential for boosting US yields and the USD.

CAD - Canadian Dollar

The CAD was strong last week but has recently fallen back, impacted by weaker stock markets and becoming one of the weaker currencies today. Its losses are expected to be limited leading up to Wednesday's Bank of Canada decision, where no policy change is anticipated. The Bank aims to moderate expectations of early rate cuts, which are more influenced by US market trends than Canadian developments. Observe USD/CAD trends.

EUR - Euro

The EUR underperformed last week due to significant losses in key markets. Although it's steadier now, it might continue to lag behind other major currencies against the USD if cross-market flows remain unfavorable. Despite Germany reporting a robust €17.8 billion trade surplus for October, export trends are still weak.

GBP - British Pound

Sterling has slightly weakened in the session, but its decline against the USD is modest compared to other currencies. In the absence of significant domestic data this week, external influences such as risk sentiment, overall USD trends, and to a lesser extent, the performance of the EUR, will dictate GBP trading dynamics.