The Pound Sterling (GBP) outperforms its major peers on Tuesday, with investors focusing on Middle East tensions driving market sentiment.

With the USD weakening on concerns about the US economy, USD/CAD has naturally trended lower again.

Weaker stocks tugged the Canadian Dollar (CAD) a bit lower yesterday and remain a risk for the currency in the near term as China and rising yields weigh on sentiment, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

The start of the week has been quite mixed in FX, with the low-yielding JPY and CHF rising and the high-beta AUD and NZD under additional pressure, ING’s FX analyst Francesco Pesole notes.

The USD continues to drift as it consolidates last week’s advance, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

Markets are virtually fully pricing in an ECB rate cut next week (23bp), but our economics team discusses here how the decision may well be much closer than the rates market suggests, ING’s FX analyst Francesco Pesole.

The Euro (EUR) has nudged higher to near 1.10 this morning despite signs that even relative hawks on the ECB governing council may not oppose a rate cut late this month, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

The AUD/USD pair declined by 0.50% to 0.6765 on Monday, pressured by a stronger US Dollar and concerns over geopolitical tensions in the Middle East.

The Greenback alternated gains with losses amidst higher yields on Monday, while investors continued to digest Friday’s Payrolls against the backdrop of steady prudence in response to rising geopolitical jitters in the Middle East.

EUR/JPY trades down almost half a percent in the 162.50s on Monday as it closes in on the ceiling of its multi-week trading range from the early August lows.

The AUD/USD pair kicks off the new week on a positive note, snapping a two-day losing streak and stalling its recent pullback from the highest level since February 2023 touched last Monday.

EUR/USD below 1.10 seemed to be a matter of when rather than if following the rewidening of the USD:EUR short-term rate gap, ING’s FX analyst Francesco Pesole notes.

Gold price (XAU/USD) extends its sideways consolidative price move on Monday and remains confined in a familiar range held over the past week or so amid mixed fundamental cues.

The US Dollar (USD) is consolidating last week’s solid rise, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

The Canadian Dollar (CAD) has softened against the stronger US Dollar (USD) over the past week but losses are relatively contained, leaving the CAD as the top-performing G10 currency over the past five days with a drop of a little under 0.5% (versus a 3% drop for the JPY and NZD and a 1.8% decline in the AUD), Scotiabank’s Chief FX Strategist Shaun Osborne notes.