Pound (GBP) Cements Status as Risk Sensitive Currency
The Pound (GBP) continued to behave like a risk sensitive currency through yesterday’s session, slumping against its peers as the market mood began to sour.
Sterling has grown increasingly sensitive to changes in risk sentiment in recent months as the coronavirus crisis and rising Brexit uncertainty both take their toll on the currency.
In the continued absence of any notable economic data from the UK, the focus for GBP investors today will be on the UK’s coronavirus stats and whether the government is preparing to ease lockdown restrictions further.
Euro (EUR) Jumps as GDP Beats Expectations
The Euro (EUR) trended higher on Tuesday, making steady gains following the publication of the Eurozone’s latest GDP estimate.
Eurostat reported GDP slumped 3.6% in the first quarter of 2020 as the coronavirus lockdowns came into effect, slightly beating the previous estimate of a 3.8% contraction.
Looking ahead, with Eurozone data thin on the ground today, EUR investors may turn their attention to the bloc’s battle against the coronavirus, where steady progress toward reopening the economy is likely to reflect well on the single currency.
US Dollar (USD) Buoyed by Safe-Haven Demand
The US Dollar (USD) strengthened through yesterday’s session, with the safe-haven currency finding support amidst a slight souring of market risk sentiment.
This slide in sentiment appeared to be partly attributed to the negative trade figures coming from Europe as well as fears that US-China tensions could be flaring again as Beijing looks to flex its political muscles.
Coming up, the spotlight today will be on the Federal Reserve’s latest rate decision. While no policy changes are expected from the Fed this month, the bank will be publishing its first economic forecasts since December, which are sure to be of interest to USD investors.
Canadian Dollar (CAD) Weakens amid Sliding Oil Prices
The Canadian Dollar (CAD) ticked lower on Tuesday, with the oil-sensitive ‘Loonie’ coming under some pressure amidst a pull-back in crude prices.
Australian Dollar (AUD) Undermined by Weak Chinese CPI Figures
The Australian Dollar (AUD) found its attempts to rally cut short overnight on Tuesday as weaker-than-expected inflation figures from China weakened demand for the China-proxy ‘Aussie’.
New Zealand Dollar (NZD) Buoyed in Risk-On Trade
The New Zealand Dollar (NZD) ticked higher overnight, recouping some of its losses from Tuesday’s trading session as a bout of US weakness ahead of the Fed’s latest rate decision helped to bolster the appeal of the ‘Kiwi’.