Pound (GBP) Rallies on Brexit Day
The Pound (GBP) punched higher at the end of last week’s session, maintaining its upward momentum from the Bank of England’s (BoE) rate decision on Thursday.
The upside in Sterling also appeared to be driven by relief that, after more than three years of uncertainty, the first stage of Brexit officially came to a close with the UK’s formal exit from the EU on Friday.
The Pound may walk back some of these gains later today however as Boris Johnson will set out his approach to the next stage of negotiations and is expected to refuse to accept alignment with EU rules.
Euro (EUR) Mixed as Eurozone GDP Underperforms
Trade in the Euro (EUR) was mixed on Friday, with the currency initially facing some pressure as Eurozone GDP unexpectedly slowed at the end of 2019 following a shock contraction in the French and Italian economies.
However, the single currency was still able to find some support later in the session, with EUR sentiment appearing buoyed by relief that the first stage of Brexit was coming to a close.
Looking ahead, the Euro could face some pressure over the coming week as economists forecast Eurozone retail sales slumped in January.
US Dollar (USD) Slips on Mixed Data
The US Dollar (USD) edged lower at the end of last week’s session, with some mixed US economic data robbing the ‘Greenback’ of some of its recent momentum.
While the University of Michigan’s consumer sentiment index beat forecasts in January, a modest uptick in inflation and a sharp slump in the Chicago business PMI took the shine off the US Dollar.
Coming up, the publication of the latest ISM manufacturing PMI may keep the pressure on the US Dollar today as economists predict another contraction in the US factory sector in January.
Canadian Dollar (CAD) Slips Despite Positive GDP Figures
The Canadian Dollar (CAD) struck a new six-week low on Friday as the continued slump in oil prices weighed on the commodity-linked currency.
However, these losses were mitigated somewhat by the release of Canada’s latest GDP figures as CAD investors welcomed a surprise uptick in growth in November.
Australian Dollar (AUD) Retreats amid Coronavirus Concerns
The Australian Dollar (AUD) fell back again at the end of last week, with investors shying away from the risk-sensitive currency as coronavirus fears continued to grip the markets.
New Zealand Dollar (NZD) Weakened by Market Risk Aversion
The New Zealand Dollar (NZD) also trended lower on Friday as the risk-off mood limited the appeal of the ‘Kiwi’.