Pound (GBPUSD=X)

The British pound held steady against the US dollar on Monday, trading at $1.2619, following a sharp decline on Friday that saw it drop to its lowest level in four months. The pound's slight recovery was supported by a weaker dollar, as the post-election rally in US markets appeared to lose momentum.

However, the pound's recent resilience may be short-lived, with investors bracing for the release of the UK’s latest inflation figures later this week. If inflation remains stubbornly high, it could fuel concerns about the Bank of England's tightening policy, potentially weighing on the currency.

Against the euro (GBPEUR=X), sterling was also flat, trading at €1.1968.

"The pound continues to hold its own vs. the EUR," said Jane Foley, senior FX strategist at Rabobank. "We retain our forecast that EUR/GBP is likely to edge to the 0.8150 level on a 12-month view."

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The euro is also facing broader headwinds, with political uncertainty in Germany and concerns about the potential impact of US tariffs under the next Trump administration weighing on the single currency. Still, the pound’s prospects against the euro could face fresh challenges if UK inflation and upcoming PMI data disappoint market expectations.

Gold (GC=F)

Gold prices saw a modest uptick on Monday, following a sharp decline last week, as the dollar’s recent rally faltered. Traders are now looking ahead to remarks from Federal Reserve officials later this week for further direction on the US interest rate outlook.

Spot gold rose marginally by 0.1% to $2,588.28 per ounce, while US gold futures edged 0.6% higher to $2,586.30 at the time of writing.

The increase comes after the US dollar index (DX-Y.NYB), which surged 1.6% last week, pulled back slightly, easing pressure on gold. A weaker dollar tends to make gold more affordable for holders of other currencies, supporting demand for the precious metal.

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Gold prices have struggled to break through the key $2,600 level since last week, with market participants factoring in expectations of a more cautious pace of rate cuts by the Federal Reserve.

This slump comes after a strong rally over the past year, with gold gaining nearly 30% in value and reaching an all-time high of $2,790.15 in late October, as investors sought safe-haven assets amid global economic uncertainties.

Oil (BZ=F)

Oil prices were slightly lower during early European trading as concerns about slowing fuel demand in China and a forecasted global oil surplus limited eliminated previous gains over the weekend as the conflict in Ukraine escalated.