Pound (GBP) Stable as PM Remains in Intensive Care
The Pound edged higher against the Euro and US Dollar yesterday despite PM Boris Johnson remaining in intensive care.
It was reported that the Prime Minister is not on a ventilator and is in ‘good spirits’.
Foreign Secretary Dominic Raab is currently deputising for the Prime Minister and he asserted that the cabinet is working as a great team in order to keep things running smoothly.
GBP exchange rates could gain if the Prime Minister’s condition improves enough for him to be moved out of intensive care.
That being said, investors are likely to exert caution with no end to the lockdown period in sight and the number of UK fatalities rising.
Euro (EUR) Weakens after Eurozone Meeting Ends without Agreement
The news that a 16 hour emergency conference of Eurozone Finance Ministers ended without an agreement over how to tackle the economic impact of the coronavirus has put the Euro under pressure this morning.
According to reports, Italy and the Netherlands in particular remain at loggerheads about the conditions attached to using the Eurozone’s bailout funds.
The Euro may struggle to exert itself today with data lacking and concerns about the Eurozone’s outlook persisting.
US Dollar (USD) Recovers Losses
After sliding against its peers in response to rising risk appetite, the US Dollar pushed higher during the Asia Pacific session.
USD exchange rates benefited from the news that Eurozone Finance Ministers failed to agree a coronavirus response following a 16 hour emergency meeting.
News that the Eurozone remains fractured in its approach to the economic impact of the coronavirus could lend the US Dollar further support today, although investors will also be looking ahead to the release of minutes from the last Federal Open Market Committee (FOMC) gathering.
Canadian Dollar (CAD) Benefits as Oil Prices Climb 2.5%
Hopes that the upcoming OPEC+ meeting could still lead to a reduction in global oil production saw prices recover 2.5% during yesterday’s European session.
This offered the Canadian Dollar a leg up against its rivals and diminished the impact of March’s Ivey PMI. The index plunged from 54.1 to 26 on the month, representing a sharp contraction.
However, the Canadian Dollar could dip today if local data reveals a sharp decline in building permits.
RBA Decision Supports Australian Dollar (AUD)
Demand for the Australian Dollar picked up in the wake of the Reserve Bank of Australia’s (RBA) April policy meeting, although it came as little surprise that policymakers opted to leave interest rates on hold at their record low of 0.25%.
The ‘Aussie’ has since trimmed some of its gains however as a result of the bounce back in the US Dollar.
Easing Covid-19 Fears Encourage New Zealand Dollar Gains
Reports that the Covid-19 pandemic is starting to peak in Europe, and a subsequent increase in risk appetite, supported the New Zealand Dollar yesterday.
With fresh New Zealand economic data lacking this week NZD exchange rates will remain driven by developments in market sentiment.