Today’s Currency News: Pound Gains, US Dollar Sell-Off Continues as Market Sentiment Improves

Pound (GBP) Extends Gains Despite Dire Growth Warning

The Pound (GBP) continued to climb yesterday, refreshing a one-month high thanks to the IMF’s upbeat assessment of the UK’s ‘aggressive fiscal approach’ to the coronavirus crisis.

This upside in GBP exchange rates came in spite of the Office for Budget Responsibility (OBR) warning that the coronavirus crisis could see the UK economy shrink by 35% by June.

Looking ahead, Brexit will return to the spotlight today as UK and EU negotiators look to a set a new timetable for trade talks.

Euro (EUR) Buoyed as Millions of Europeans Return to Work

The Euro (EUR) lurched higher on Tuesday as EUR investors welcomed moves by some European countries to start the gradual process of reopening businesses.

Austria joined Spain in allowing a number of non-essential workers to return to work on Tuesday, while French President Emmanuel Macron mulled over plans on how to bring the lockdown to an end.

However, Europe’s coronavirus outbreak remains far from over and EUR investors will be keeping a close eye on confirmed cases to see if this easing of restrictions comes too soon.

US Dollar (USD) Shunned as Market Mood Improves

The US Dollar (USD) remained on the defensive through yesterday’s session as the appeal of the safe-haven currency continued to be undermined by easing coronavirus concerns.

USD investors have also expressed concern about President Trump’s desire to relax restrictions as soon as possible, particularly given the team he has tasked with planning how and when to reopen the US economy doesn’t include any health experts.

In the spotlight for USD investors today will be the publication of the latest US retail sales figures. The US Dollar could stumble if consumer spending plummeted as forecast last month.

Canadian Dollar (CAD) Undermined by Slumping Oil Prices

The Canadian Dollar (CAD) dropped on Tuesday as another crude sell-off weighed heavily on the oil-linked ‘Loonie’.

Coming up, all eyes will be on the Bank of Canada (BoC) today, with CAD investors waiting to hear if the BoC opted to cut interest rates again this month.

Australian Dollar (AUD) Slides on Gloomy Data

The Australian Dollar (AUD) retreated overnight on Tuesday as the latest consumer confidence survey revealed household sentiment has fallen to its worst levels since 1990.

The ‘Aussie’ is likely to find itself under further pressure later tonight as Australia’s jobs report is expected to show a sharp surge in domestic unemployment last month.

New Zealand Dollar (NZD) Slides on Coronavirus Developments

The New Zealand Dollar (NZD) also stumbled overnight, with the risk-sensitive currency dipping after China reported 89 new coronavirus cases, stoking fears the country remains at risk of another outbreak.

Data Releases
13:30 USD Retail Sales (Mar)
13:30 USD Empire State Manufacturing Index (Apr)
14:15 USD Industrial Production (Mar)
15:00 CAD BoC Rate Decision
02:30 AUD Unemployment Rate (Mar)

Matthew Andrews

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