Daily Currency News: US Dollar (USD) Exchange Rate Rally Halted by Hopes for Coronavirus Treatment

Pound (GBP) Ends Week on a Positive Note

The Pound (GBP) made some tentative gains at the end of last week, allowing it to close out the session slightly higher against the majority of its peers.

This uptick appeared to be partly driven by suggestions that Sterling is currently undervalued, after the currency suffered disproportionately during the early stages of the coronavirus crisis.

Looking to the week ahead, there will be plenty of UK economic data for GBP investors to sink their teeth into, the majority of which will help to shed more light on how the coronavirus crisis is impacting the UK economy.

Euro (EUR) Stalls on EU Unity Concerns

The Euro (EUR) was mostly directionless on Friday. While the Eurozone’s coronavirus situation improved, EUR investors remained wary over the recent cracks in EU unity.

Having failed to agree on the implementation of ‘coronabonds’, EU leaders will attempt to reach a consensus over a coordinated lockdown exit strategy and recovery plans later this week, but analysts remain pessimistic.

In the meantime the focus for EUR investors in the first half of this week will be the latest ZEW economic surveys, which are expected to report economic sentiment in the Eurozone collapsed to new lows in April.

US Dollar (USD) Muted on Coronavirus Treatment Hopes

The US Dollar (USD) found itself rangebound at the end of last week’s session as demand for the safe-haven currency was capped by reports of positive progress in trials for a coronavirus drug treatment.

Company Gilead Sciences said that nearly all patients trialing its new antiviral medication at the University of Chicago hospital were discharged within a week, bolstering hopes that the new drug could help towards easing lockdowns around the world.

If market sentiment continues improving on hopes for a coronavirus treatment demand for the US Dollar could be limited.

Canadian Dollar (CAD) Weaker as Oil Strikes New 20-Year Low

The Canadian Dollar (CAD) stumbled on Friday as another dive in crude prices reflected poorly on the commodity-linked ‘Loonie’.

These losses look likely to be extended this week after WTI crude fell as low as $14 a barrel in early trade.

Australian Dollar (AUD) Lifted by Coronavirus Optimism

The Australian Dollar (AUD) rallied at the end of last week’s session, with the risk-sensitive ‘Aussie’ firming amid hopes of a possible coronavirus treatment.

New Zealand Dollar (NZD) Strengthened by Improved Risk Sentiment

The New Zealand Dollar (NZD) also pressed higher on Friday, with improved market sentiment helping to buoy demand for the risk-sensitive ‘Kiwi’.

 

Matthew Andrews

Contact Matthew Andrews


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