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CAD
The Canadian dollar finished Friday modestly softer against the US dollar, reflecting the familiar combination of oil sensitivity and rate expectations. With energy price action less supportive and broader USD moves still influential, USD/CAD held a slightly firmer tone into the close. That said, CAD performance remained more “reactive” than “directional”—in line with the pattern we’ve highlighted recently: the loonie tends to struggle to build sustained momentum unless oil trends are clear and domestic data consistently surprises in one direction.
Today is more interesting for CAD than for most majors because Canada’s inflation print is due, alongside the BoC’s Business Outlook Survey. We see CPI as the main volatility catalyst: a firmer read would likely push back against near-term easing expectations and support CAD, while a downside surprise could quickly revive dovish pricing and lift USD/CAD. Later in the week, Canada retail sales adds a second checkpoint on the growth side. For positioning, we’d expect CAD to remain tightly tethered to oil and US yields, but with a clear “domestic data override” around today’s CPI release.
USD
Friday’s session saw the dollar give back some of its recent safe-haven bid, with price action largely driven by a modest improvement in broader risk tone and a steady grind lower in energy volatility. That backdrop kept the dollar mixed rather than uniformly weaker: it held up best against the more cyclical bloc, while high-beta and some EM FX found a little breathing room into the weekend. In G10, the broad message was that the market remains highly sensitive to “headline risk” and rate-differential re-pricing—two themes we’ve emphasised in our recent morning notes—so even small shifts in sentiment can generate outsized intraday swings.
For today, the calendar is comparatively light, so we expect the dollar to take its cue from risk proxies (equities, credit and oil) and from Fed speak rather than from top-tier data. Our week-ahead framework still applies: unless incoming numbers decisively change the growth/inflation narrative, the dollar’s direction should be set by how markets price the Fed path versus peers and by any geopolitics-driven repricing of volatility.
EUR
The euro was range-bound into the weekend, with EUR/USD ending Friday close to the upper end of its recent multi-week band. Price action again reflected the balance we’ve been flagging: the single currency benefits when global risk sentiment stabilises and when the market questions how restrictive the Fed can remain, but it struggles to extend gains without clearer evidence that euro-area activity is re-accelerating. The end result on Friday was a slight consolidation rather than a breakout—consistent with the pattern we’ve highlighted in recent data-reactive pieces, where EUR rallies have tended to fade unless supported by a clear shift in rates pricing.
Today’s focus is more “positioning and tone” than “hard data.” With euro-area top-tier releases later in the week, we expect EUR/USD to trade off the dollar leg: moves in US yields, risk sentiment and any energy-price impulses will remain central. Looking ahead, our baseline remains that the euro needs either (i) softer US data that pulls US yields lower, or (ii) a tangible improvement in European growth signals, to sustain upside beyond the recent highs.
GBP
Sterling ended Friday little changed on the day, with GBP/USD dipping slightly while holding comfortably within the near-term range that has dominated April. The price action matched what we’ve been stressing in prior notes: the pound is trading as a hybrid—part domestic rates story, part global risk proxy. When risk sentiment steadies, GBP can grind higher, but it remains vulnerable to abrupt reversals when US yields rise or when markets re-price global volatility. Friday’s muted close also reflected a “wait for UK data” posture, with traders reluctant to add conviction ahead of this week’s key inflation and activity updates.
For today, we expect relatively contained ranges, with early UK housing indicators unlikely to shift the broader narrative on their own. The real test comes midweek with UK CPI (Wednesday) and then retail sales (Friday), which should help shape expectations for how quickly the Bank of England can move from “holding” to “easing” (a key plank in our week-ahead). Until then, GBP will likely trade off the dollar and global risk tone, with 1.35 in GBP/USD remaining an important psychological pivot.