Pound (GBP) Subdued Amid Brexit Uncertainty
The Pound (GBP) was mostly rangebound through the start of this week’s session in response to renewed Brexit uncertainty.
This comes in the wake of comments from Sajid Javid over the weekend in which he said the UK will not seek to align itself with EU regulations after Brexit.
Javid’s comments sparked concerns about how this may disrupt the UK economy as well as make reaching a trade agreement with the EU more difficult as the latter seeks to ensure a ‘level playing field’.
Top of the agenda today we have the UK’s latest employment report, where a suspected drop in wage growth could weigh heavily on Sterling as it increases the odds of a Bank of England (BoE) rate cut this month.
Euro (EUR) Muted Ahead of ECB Meeting
The Euro (EUR) traded in a narrow range on Monday, with investors reluctant to alter their positions in the single currency ahead of the European Central Bank’s (ECB) upcoming policy meeting.
This week’s meeting will see the ECB launch its strategy review, with EUR investors eager to learn more about the scope and timing of said review.
In the meantime, the Euro could face some pressure this morning if the latest ZEW surveys reveal economic sentiment in the Eurozone weakened again this month.
US Dollar (USD) Maintains Upside despite Thin Trade
The US Dollar (USD) edged higher during yesterday’s session, maintaining some of the momentum it enjoyed on Friday.
However, the upside in the ‘Greenback’ proved limited, as the closure of US markets for Martin Luther King Day created thin trading conditions for the US currency.
The focus for USD investors today is likely to turn to US politics, as Donald Trump’s impeachment trial finally gets underway in the Senate.
Canadian Dollar (CAD) Buoyed by Uptick in Oil Prices
The Canadian Dollar (CAD) edged slightly higher in trade on Monday, with the commodity-linked ‘Loonie’ strengthening as WTI crude prices accelerated back above $59 a barrel.
Australian Dollar (AUD) Weakened by Risk Aversion
The Australian Dollar (AUD) trended lower overnight on Monday, with the risk-sensitive currency coming under fire amid concerns regarding the corona-virus outbreak in China.
Meanwhile, AUD exchange rates may come under some pressure later this evening, if consumer confidence is shown to have weakened in January.
New Zealand Dollar (NZD) Slips amid Risk-Off Mood
The New Zealand Dollar (NZD) also weakened overnight as investors shied away from the ‘Kiwi’ in risk-off trade.
Coming up, NZD exchange rates could weaken this afternoon if diary prices fall at the latest global dairy auction.