Pound (GBP) Flying on USD Weakness
The Pound (GBP) shot higher on Thursday on the back of USD weakness as Sterling continues to behave like a risk-sensitive currency.
Elsewhere, GBP investors seemed content with the Bank of England’s (BoE) decision to leave interest rates on hold yesterday having already implemented two emergency rate cuts earlier in the month.
However, it remains uncertain whether the UK currency will be able to consolidate these gains, with coronavirus uncertainty and concerns over the exposure of the UK’s banking sector both remaining key risks to the Pound.
Euro (EUR) Buoyed by Positive Coronavirus Headlines
The Euro (EUR) drifted higher yesterday as EUR sentiment was improved by some positive coronavirus headlines coming out of the EU.
These mostly centred on Italy as the country hardest hit by the coronavirus continued to report a fall in new cases of infection, bolstering hopes Italy’s harsh quarantine measures are beginning to have a real impact.
Should European developments remain positive we could see the single currency maintain its upward trajectory through today’s session.
US Dollar (USD) Collapses in the Face of Mammoth US Jobless Claims
The US Dollar (USD) plummeted on Thursday as the US was engulfed by a surge of unemployment as a consequence of the coronavirus crisis.
US initial jobless claims rocketed up by 3.2 million last week, easily smashing the previous weekly unemployment record of 700,000 and weighing heavily on USD exchange rates as investors struggled to comprehend the numbers.
Concerns about the massive layoffs and the damage they might do to the US economy are likely to remain prevalent through today’s session, limiting any upside in the US Dollar.
Canadian Dollar (CAD) Upside Capped by Weaker Oil Prices
While the Canadian Dollar (CAD) was able to creep higher yesterday, upside in the oil-linked currency was limited as crude prices were weakened by growing concerns of a supply glut amid a sustained fall in global demand.
Australian Dollar (AUD) Rallies on USD Weakness
The Australian Dollar (AUD) leapt higher on Thursday on the back of broad weakness in the US Dollar (USD), but found its gains capped somewhat overnight as data revealed a sharp drop in Chinese industrial profits last month.
New Zealand Dollar (NZD) Climbs as Risk Sentiment Improves
The New Zealand Dollar (NZD) also trended higher during yesterday’s trading session as the collapse of USD helped to improve market risk appetite.