[author: Katie Keith]

The euro trended higher on Monday, with the single currency able to shrug off some underwhelming German data.

Meanwhile, the pound is trading sideways so far this morning, with GBP/EUR flat at €1.1817 and GBP/USD stable at $1.2687. GBP/CAD is rangebound at CA$1.7320, while GBP/AUD and GBP/NZD hold steady at AU$1.9032 and NZ$2.0707, respectively.

Coming up, will a deterioration in US consumer confidence drag on the US dollar today?

What’s been happening?

The euro initially faced some resistance yesterday, following the publication of Germany’s latest IFO business climate survey.

June’s index reported an unexpected decline in German business morale, with sentiment falling to a three-month low.

Despite the lacklustre data, the euro was still able to close the European session higher as it was supported by its negative correlation with the US dollar.

The US dollar stumbled on Monday as positive shift in market risk appetite tempered demand for the safe-haven currency.

However, these losses were modest in scope, thanks in part to a continued uptick in US Treasury yields.

Finally, the pound trended broadly higher at the start of this week as the increasingly risk-sensitive currency was underpinned by the improving market mood.

What’s coming up?

Looking ahead, the only economic data of note today will be the release of the latest US consumer confidence survey.

Today’s index is expected to report US consumer sentiment deteriorated in June, which may act as a headwind for the US dollar later this afternoon.

On the other hand, a speech by Federal Reserve official Michelle Bowman could underpin USD if she strikes a hawkish note.

In the absence of any notable Eurozone data, the focus for EUR investors may turn to the impending French parliamentary election. Will a sense of caution see investors shy away from the single currency?

UK data is also in short supply today, which could leave the pound without any strong directional bias.