Pound (GBP) Gains Despite Dire Warning from the OECD
The Pound (GBP) ticked higher through Wednesday’s trading session, appreciating on the back of improving market sentiment.
This bounce in Sterling came in spite of the Organization for Development and Cooperation (OECD) warning the UK is likely to be hardest hit by coronavirus out of all the world’s most developed economies.
Turning to the second half of the week and the focus is likely to be on the UK’s latest GDP release, with forecasts for a massive 20% plunge in GDP in April likely to reflect poorly on the Pound.
Euro (EUR) Rangebound in Directionless Trade
The Euro (EUR) found itself caught in a mid-week lull yesterday as the absence of any notable economic data left EUR exchange rates mostly directionless.
However, the single currency avoided giving any notable ground as EUR sentiment remained buoyed by hopes that the Eurozone economy will be back firing on all cylinders again sooner rather than later.
In the meantime, the focus will be on the latest EU summit, in which EU leaders will discuss the European Commission’s proposal for a €750bn coronavirus recovery fund.
US Dollar (USD) Retreats as Fed Strikes Dovish Tone
The US Dollar (USD) trended lower on Wednesday, in response to the Federal Reserve’s latest rate decision.
While the Fed’s decision to leave rates on hold came as little surprise to USD investors, Chair Jerome Powell stated the Fed is ‘not even thinking about thinking about raising rates’, and warned unemployment is likely to remain elevated for some time.
Coming up today, USD investors will be focused on the latest US jobless figures, with a slowdown in the number of new unemployment claims at the start of June potentially bolstering the US Dollar.
Canadian Dollar (CAD) Subdued amid Oil Price Fluctuations
The Canadian Dollar (CAD) struggled to find momentum yesterday, with demand for the commodity linked currency muted as WTI oil prices continued to fluctuate around $38 a barrel.
Australian Dollar (AUD) Retreats in Risk-Off Trade
After making gains on Wednesday, the Australian Dollar (AUD) sank overnight following a sudden reversal of market risk sentiment in response to the Fed’s gloomy economic forecasts.
New Zealand Dollar (NZD) Slips on Downbeat Market Mood
The New Zealand Dollar (NZD) also trended lower overnight on Wednesday, as the sudden souring of market sentiment limited the appeal of the ‘Kiwi’.