Pound Sterling (GBP) Exchange Rates React to PM News
The Pound was on the back-foot yesterday after the Gfk consumer confidence index plunged sharply on the month in March.
Sterling then recorded further losses against the US Dollar and Euro in response to the news that PM Boris Johnson had been admitted to intensive care.
Downing Street reported that it was a precautionary measure, and the Pound recovered ground overnight.
That being said, Sterling will remain highly reactive to the latest headlines.
Decline in German Factory Orders Weighs on Euro (EUR)
The Euro came under pressure yesterday as German factory orders data for February showed a -1.4% decline on the month. While this was a smaller contraction than expected, the report still undermined confidence in the outlook of the Eurozone’s powerhouse economy.
This morning’s German industrial production data also showed a smaller-than-expected contraction in February.
However, while the Euro is struggling against many of its peers it has climbed by over 0.5% against a broadly-weakening US Dollar.
US Dollar (USD) Falters as Risk Appetite Returns
With China reporting no new deaths for the first time in the coronavirus crisis and new cases falling in Italy and Spain, demand for safe-haven currencies eased and the US Dollar declined across the board.
That trend has continued today and (with local data lacking) the US Dollar may extend losses if the latest headlines prove positive.
The next US release of note is tomorrow’s publication of minutes from the Federal Open Market Committee’s (FOMC) last gathering.
Canadian Dollar (CAD) Shrugs Off Latest Oil Price Decline
Another day of sharply declining oil prices failed to weigh on the Canadian Dollar on Monday. Although the postponement of the OPEC+ production meeting saw Brent crude trending lower, rising risk appetite lent the Canadian Dollar support.
However, with forecasts pointing towards a decline in March’s Ivey PMI the mood towards the Canadian Dollar could sour this afternoon.
Easing Covid-19 Anxiety Buoys Australian Dollar (AUD)
The Australian Dollar started the week on a strong footing, driven sharply higher against many of the majors as risk appetite returned.
The ‘Aussie’ also benefited from the Reserve Bank of Australia’s (RBA) decision to leave interest rates unchanged at last night’s policy meeting.
Improved Market Sentiment Lifts New Zealand Dollar (NZD)
Easing anxiety over Covid-19 allowed the New Zealand Dollar to recover some ground against its rivals in spite of an absence of fresh New Zealand data releases.
NZD exchange rates remained buoyant even after the NZIER Business Opinion Survey dropped from -21 to -70.