Pound (GBP) Dented by No-Deal Brexit Fears
The Pound (GBP) tumbled during yesterday’s trading session as revived fears of a no-deal Brexit took their toll on the currency.
This followed comments from a Downing Street spokesperson who reiterated the government’s position that the Brexit transition period will not be extended past the end of 2020.
In the absence of any notable UK data, it’s likely Sterling could continue to struggle as Brexit and concerns over a second wave of coronavirus cases limit the appeal of the Pound.
Euro (EUR) Bolstered by €750bn EU Coronavirus Fund
The Euro (EUR) rocketed higher on Wednesday, jumping on the back of proposals from the EU for a €750bn coronavirus recovery fund.
The relief fund was cheered by EUR investors, who hope the sizable grants being earmarked for the countries hardest hit by the health crisis will help the Eurozone to bounce back in the coming months.
However, these gains could be trimmed later this morning as the Eurozone’s latest business confidence figures are expected to show economic sentiment remained in the doldrums this month.
US Dollar (USD) Strengthened by US-China Tensions
The US Dollar (USD) crept higher yesterday, with the safe-haven currency finding itself back in demand amidst rising tensions between the US and China.
The latest developments have seen Beijing vow to respond to any action taken by the US against the new national security law in Hong Kong, following Donald Trump’s suggestion the White House will ‘do something’ about the issue this week.
Coming up, the US Dollar could face some headwinds later this afternoon with the publication of the US durable goods figures, with economists predicting orders will have suffered a record drop in April.
Canadian Dollar (CAD) Gains Capped by Sliding Oil Prices
The Canadian Dollar (CAD) continued to tick higher on Wednesday, but the oil-sensitive currency found its gains capped by a 3% drop in WTI crude prices.
Australian Dollar (AUD) Buoyed by Vaccine Hopes
The Australian Dollar (AUD) edged higher overnight on Wednesday, reversing some of its losses from the European session as optimism over a potential coronavirus vaccine offset concerns of escalating tensions between the US and China.
New Zealand Dollar (NZD) Gains on Improving Business Sentiment
The New Zealand Dollar (NZD) also ticked up in overnight trade, with the ‘Kiwi’ finding support from a stronger-than-expected uptick in domestic business confidence in May.