Pound (GBP) Undermined by Brexit Concern
The Pound (GBP) was back on the defensive yesterday amid renewed concerns over a potential no-deal Brexit.
This came as a Downing Street spokesperson said the UK government will refuse any extension to the Brexit transition period, despite calls from the IMF for a delay so as not to add to the ‘unprecedented uncertainty’ arising from the coronavirus crisis.
The Pound may remain on the back foot heading into the weekend so long as uncertainty remains over the return of Boris Johnson amid concerns his absence has left the government without a clear leader.
Euro (EUR) Flat amid Concerns over EU Unity
The Euro (EUR) was left mostly directionless on Thursday as investors focused on efforts by Eurozone countries to reopen their economies.
While EUR investors welcomed news that many countries are looking at ways to gradually return to normal, they expressed some concern that most appear to be ignoring the guidelines published by the European Commission, stoking concerns about cracks in EU unity.
The Eurozone’s final CPI reading for March will be published this morning and is expected to confirm inflation in the bloc slumped to a five-month low.
US Dollar (USD) Undermined by Another Surge in Jobless Claims
After rocketing higher on Wednesday, the US Dollar’s (USD) rally was brought to an abrupt halt during yesterday’s European session following the publication of the latest US initial jobless claims.
These revealed that US unemployment rose by another 5 million last week, bringing the total who have been laid off since the start of the coronavirus crisis to over 20 million, with USD investors fearing how much higher this number could climb in the weeks to come.
That said, the US Dollar remains well positioned to close out the session on a high as long as concerns over a deep global recession continue to buoy demand for the safe-haven currency.
Canadian Dollar (CAD) Rallies as Oil Prices Rebound
The Canadian Dollar (CAD) trended higher on Thursday, with the appeal of the oil-linked currency improving in line with a rebound in WTI crude prices on the expectation of sharp production cuts from Russia.
Australian Dollar (AUD) Rallies on Risk-On Trade
The Australian Dollar (AUD) bounced back overnight on Thursday, with the currency propelled higher by an improvement in risk appetite.
The ‘Aussie’s gains were capped however following the release of China’s latest GDP figures as the coronavirus outbreak saw the country record its first quarterly contraction on record.
New Zealand Dollar (NZD) Buoyed by Improved Market Sentiment
The New Zealand Dollar (NZD) also strengthened overnight as risk appetite rose.