Pound (GBP) Slumps on Lockdown Uncertainty
The Pound (GBP) started poorly this week, facing some heavy selling amid confusion over the easing of UK lockdown measures announced by Boris Johnson over the weekend.
Further limiting Sterling’s appeal was renewed Brexit uncertainty following the start of the penultimate round of talks before the June deadline on whether to extend negotiations.
Meanwhile, any upside in the Pound during today’s session is likely to prove limited as GBP investors await the publication of the UK’s latest GDP estimate on Wednesday for fresh impetus.
Euro (EUR) Stable as Europe Begins to Reopen
The Euro (EUR) ticked higher during yesterday’s session as EUR investors were cheered as more parts of the Eurozone began easing their coronavirus lockdowns.
France ended eight weeks of lockdown on Monday, with millions of citizens returning to school and work as the Eurozone’s second largest economy began to reopen.
This uptrend may continue through today’s session so long as new coronavirus cases in Europe continue to fall, encouraging more countries to begin easing their lockdown measures.
US Dollar (USD) Bolstered by Risk-Off Trade
The US Dollar (USD) shot higher on Monday, with the safe-haven currency finding itself back in demand following a souring of market sentiment.
Further buoying the appeal of the ‘Greenback’ were suggestions that it would be highly unlikely the Federal Reserve would consider negative interest rates this year.
Looking ahead, we may see the US Dollar relinquish some of these gains with the publication of the US consumer price index this afternoon as economists forecast inflation will have fallen off a cliff in April.
Canadian Dollar (CAD) Slips as Oil Rally Runs Out of Steam
The Canadian Dollar (CAD) was on the defensive through yesterday’s session as the more cautious market mood saw the recent oil rally begin losing momentum, limiting the appeal of the commodity-linked ‘Loonie’.
Australian Dollar (AUD) Weakens as China Suspends Australian Beef Imports
The Australian Dollar (AUD) trended lower overnight on Monday amidst growing tensions between China and Australia.
Beijing imposed an import ban on several Australian abattoirs, in apparent retaliation to Prime Minister Scott Morrison’s demand for an independent investigation into the coronavirus outbreak.
New Zealand Dollar (NZD) Slips in Risk-Off Trade
The New Zealand Dollar (NZD) also trended lower overnight, with skittish investors steering clear of the risk-sensitive ‘Kiwi’ amid escalating Australia-China tensions.
Looking to tonight’s Asian trading session, NZD investors will focus on the Reserve Bank of New Zealand’s (RBNZ) latest rate decision. Will the RBNZ offer more insight into its plans for negative interest rates?