Pound (GBP) Gains Despite Concerns for Brexit and Negative Interest Rates
The Pound (GBP) crept higher on Thursday, strengthening in spite of worries about a lack of progress in Brexit negotiations as well as speculation the Bank of England (BoE) is exploring the possibility of negative interest rates.
Coming up, we are likely to see Brexit worries continue to limit the appeal of Sterling through the end of the week as GBP investors brace for the latest round of talks next week.
Euro (EUR) Buoyed by Hopes for a Speedy Recovery in Europe
The Euro (EUR) remained well supported through yesterday’s trading session as investors remained upbeat by the prospect of the EU’s new coronavirus relief fund.
This helped to offset the publication of the Eurozone’s latest business confidence figures as they revealed economic sentiment remained near a decade low in May.
Looking ahead, the Euro could face some headwinds this morning as the Eurozone’s latest CPI figures are expected to reveal inflation slowed to 0.1% in May.
US Dollar (USD) Undermined by Weak Data
The US Dollar (USD) trended lower on Thursday, coming under some pressure in light of disappointing US economic data.
This was driven by the latest GDP release which reported a 5% contraction of growth in the first quarter from a previous estimate of 4.8%.
Additional pressure came from the US durable goods figures, which saw goods order plunge to a new five year low in April.
Closing out this week’s session is a speech by Federal Reserve Chair Jerome Powell, with USD investors looking for more insight into the Fed’s plans to support the US economy’s recovery.
Canadian Dollar (CAD) Slips as Oil Rally Runs out of Steam
The Canadian Dollar (CAD) was on the back foot yesterday as the appeal of the commodity-linked currency was dented by a slip in crude prices.
In the spotlight today we have the publication of Canada’s latest GDP figures. Canada is the last G7 country to publish its growth figures for the first quarter and much like its peers is expected to show a sharp drop in growth at the start of the year.
Australian Dollar (AUD) Dented by US-China Tensions
The Australian Dollar (AUD) fell back late on Thursday as fears of escalating tensions between the US and China dampened market risk appetite. Trump announced he would be holding a press conference addressing China’s handling of the coronavirus outbreak and his administration’s response to the new national security laws in Hong Kong.
New Zealand Dollar (NZD) Slips in Risk-Off Trade
The New Zealand Dollar (NZD) was also placed on the defensive in overnight trade, as jittery investors steered clear of the risk-sensitive ‘Kiwi’.