Pound (GBP) Subdued, UK-US Trade Deal at Risk
The Pound (GBP) briefly accelerated at the end of last week’s session, but ultimately relinquished nearly all of its gains following a warning from Mike Pence regarding Huawei’s role in the UK’s 5G network.
The US vice-president hinted that a future UK-US free trade deal could be at risk if Boris Johnson goes ahead with his plans to allow the Chinese telecoms giant to have a ‘non-core’ role in the country’s 5G network.
Meanwhile, the focus for GBP investors at the start of this week will be the UK’s latest GDP figures.
Barring an explosive performance in December its likely Tuesday’s figures will show the UK economy stagnated in the last quarter of 2019, likely casting the Pound lower.
Euro (EUR) Slumps on Abysmal German Industrial Data
The Euro (EUR) closed last week’s session on a sour note after Germany’s latest industrial production figures made for some grim reading.
Destatis reported factory output slumped a whopping 3.5% in December, well below expectations for a modest 0.2% contraction and the biggest slowdown in production since 2008.
Looking ahead, EUR investors will be eager to see if this slump spread to Germany’s neighbours with the release of the Eurozone’s industrial production figures later this week.
US Dollar (USD) Buoyed by Impressive Payrolls Report
The US Dollar (USD) ticked higher on Friday as markets reacted to a stronger-than-expected US non-farm payrolls report.
Payrolls were reported to have surged by 225,000 in January, up from 142,000 in December and well ahead of the 160,000 expected by markets.
Further buoying the appeal of the US Dollar were the accompanying earnings figures as wage growth accelerated at a faster-than-expected pace last month.
US economic data is pretty thin on the ground at the start of this week, but the US Dollar may be able to maintain its momentum if coronavirus fears continue to stoke demand for the safe-haven currency.
Canadian Dollar (CAD) Firms on Upbeat Employment Data
The Canadian Dollar (CAD) was also buoyed by an upbeat jobs report at the end of last week, with Canada’s unemployment rate falling to a three-month low in January after a surprise uptick in employment growth.
Australian Dollar (AUD) Nosedives amid Coronavirus Panic
The Australian Dollar (AUD) fell sharply at the end of last week, even striking a new decade low against the US Dollar (USD) as fears over the coronavirus and falling commodity prices weighed heavily on the ‘Aussie’.
New Zealand Dollar (NZD) Slips in Risk-Off Trade
The New Zealand Dollar (NZD) also trended lower on Friday, with investors shying away from the risk-sensitive ‘Kiwi’ as coronavirus concerns continued to dominate.