Today’s Exchange Rate News: Collapse in Oil Prices Sends Shockwaves through Currency Market

Pound (GBP) Stable on Hawkish BoE

The Pound (GBP) held steady at the end of last week, buoyed by the Bank of England’s (BoE) apparent resistance to implement any emergency rate cuts.

However, the upside in Sterling was capped as lingering Brexit uncertainty continued to weigh on sentiment.

In focus for GBP investors this week will be the publication of the UK’s Budget. Will the UK be able to deliver on its ambitious spending plans or will the coronavirus have forced a rethink from the Chancellor?

Euro (EUR) Surges amid USD Sell-Off

The Euro (EUR) was carried higher by broad weakness in the US Dollar (USD) on Friday.

Further buoying the Euro was the publication of some impressive data from Germany, with factory orders reportedly roaring up by 5.5% in January, the largest monthly increase in over five years.

The Euro may look to extend these gains at the start of this week’s session after German industrial production also impressed this morning.

US Dollar (USD) Battered by Fed Rate Cut Speculation

The US Dollar (USD) tumbled at the end of last week’s session on expectations that the Federal Reserve is planning an additional rate cut this month, after announcing an emergency cut last week.

As more coronavirus cases emerge in the US, markets are betting on the Fed cutting rates by an additional 75 basis points at its next policy meeting later this month.

The expectation for more rate cuts saw the US Dollar slump on Friday even with US payrolls reporting their largest rise since May 2018.

Looking ahead, the US Dollar could face additional pressure this week if USD investors continue to be spooked by a rise in domestic coronavirus cases.

Canadian Dollar (CAD) Undermined by Rout in Oil Prices

The Canadian Dollar (CAD) was left licking its wounds on Friday as the oil-sensitive currency plunged after OPEC and Russia failed to agree to new production cuts.

This turned into a full blown rout over the weekend as both sides started to slash oil prices in a bid to capture market share as global demand plummets in the face of the coronavirus crisis.

Australian Dollar (AUD) in Freefall amid Risk-off Trade

The Australian Dollar (AUD) nosedived in early trade this week, with investors shunning the risk-sensitive currency as markets entered panic mood following the collapse in oil prices.

New Zealand Dollar (NZD) Shunned by Skittish Investors

The New Zealand Dollar (NZD) also plummeted at the start of this week’s session as jittery traders dumped the ‘Kiwi’ amid a flight to safe-haven assets.

Matthew Andrews

Contact Matthew Andrews