Pound (GBP) Soars on Javid Resignation
The Pound (GBP) was catapulted higher on Thursday in response to Sajid Javid’s surprise decision to step down as Chancellor of the Exchequer.
Javid’s decision came amid a row with Downing Street over replacing his team of aides, with Javid reportedly stating that ‘no self-respecting minister’ could accept such conditions.
GBP investors cheered the news on hopes that a new team at the treasury will be more amenable to allowing the PM to include more infrastructure spending in the upcoming budget.
Looking ahead, with nothing on the docket for GBP investors today, the fallout from yesterday’s developments are likely to continue acting as the main catalyst of movement in the Pound.
Euro (EUR) Slide Continues on Gloomy EC Forecasts
The Euro (EUR) continued to trend lower yesterday, refreshing a 2020 low in the wake of the European Commission’s (EC) latest economic forecasts.
While the EC is still forecasting the Eurozone will expand by 1.2% this year, it came with the warning that the Coronavirus is a ‘key downside risk’ to the European economy.
Meanwhile, the Euro may remain on the defensive this morning after Germany’s latest GDP figures showed that the country stagnated in the last quarter of 2019.
US Dollar (USD) Firms in Risk-Off Trade
The US Dollar (USD) edged higher through yesterday’s trading session, with demand for the safe-haven ‘Greenback’ picking up again in light of renewed concerns over the coronavirus following a sharp increase in new cases in China.
Also buoying the appeal of the US Dollar was the latest US consumer price index (CPI), which reported that domestic inflation accelerated to a new one-year high in January.
Coming up, the publication of last month’s US retail sales figures may see the US Dollar extend its gains today if sales growth continued to expand in line with expectations.
Canadian Dollar (CAD) Subdued amid Crude Sell-Off
The Canadian Dollar (CAD) was left mostly muted on Thursday, with the appeal of the oil-sensitive currency dented by a slump in crude prices after the International Energy Agency (IEA) warned the coronavirus would see oil demand fall for the first time in a decade.
Australian Dollar (AUD) Muted on Coronavirus Concerns
The Australian Dollar (AUD) traded in a narrow range overnight on Thursday, with investors remaining wary of the risk-sensitive ‘Aussie’ amidst ongoing concerns over the coronavirus outbreak in China.
New Zealand Dollar (NZD) Rangebound as Risk Appetite Sours
The New Zealand Dollar (NZD) also trended flatly overnight with concerns over the economic impact of the coronavirus continuing to limit the appeal of the ‘Kiwi’.