Pound (GBP) Weakened by Brexit Fears
The Pound (GBP) was subdued on Monday, with the appeal of Sterling limited by renewed concerns that the UK could face a cliff-edge Brexit at the end of the year.
This came as officials from Downing Street said that the government’s main goal in trade talks with the EU will be to ‘restore economic and political independence from 1 January 2021’ regardless of whether a trade deal could be struck.
Coming up this morning Sterling may attempt to rally with the publication of the Confederation of British Industry’s distributive trades index, which is expected to report an improvement in retail activity this month.
Euro (EUR) Supported by German Business Confidence
The Euro (EUR) drifted higher on Monday, finding support from stronger-than-expected business confidence figures from Germany.
However, the upside in the single currency proved modest as EUR investors were wary of the sudden spike in coronavirus cases in Italy.
Looking ahead, the Euro may struggle this morning after Germany’s latest GDP release confirmed the Eurozone’s largest economy stagnated at the end of 2019.
US Dollar (USD) Strengthened by Coronavirus Fears
The US Dollar (USD) enjoyed a strong start to this week’s session, with investors flocking to the safe-haven currency in response to the latest coronavirus headlines.
The World Health Organisation (WHO) is growing increasingly concerned that the outbreak could become a pandemic following a sharp rise in cases outside of China.
Expect this uptrend in the US Dollar to continue into today’s session as well if markets remain gripped by coronavirus panic.
Canadian Dollar (CAD) Weakened by Sharp Drop in Oil Prices
The Canadian Dollar (CAD) stumbled out of the starting gates this week, with the oil-sensitive ‘Loonie’ weakening as coronavirus fears saw WTI crude prices slump nearly 5% on Monday.
Australian Dollar (AUD) Muted amid Risk-Off Trade
The Australian Dollar (AUD) struggled to find support overnight on Monday, with investors continuing to steer clear of the China-proxy ‘Aussie’.
New Zealand Dollar (NZD) Subdued on Coronavirus Concerns
The New Zealand Dollar (NZD) also floundered overnight as ongoing concerns about the economic impact of the coronavirus limited the appeal of the risk-sensitive ‘Kiwi’.