Pound (GBP) Nosedives as BoE Pumps More Money into its QE Programme
The Pound (GBP) tumbled during yesterday’s session in response to the dovish tone struck by the Bank of England (BoE) following its latest rate decision.
As had been widely predicted, the BoE kept interest rates on hold at a record low of 0.1% this month and announced a £100bn expansion to its quantitative easing programme, whilst also signalling the pace of bond purchases is set to slow.
However, Sterling may be able to recoup some of these losses through today’s session after data published earlier this morning reported a strong rebound in UK retail sales last month.
Euro (EUR) Struggles Amid Sparse Data Calendar
The Euro (EUR) struggled to find direction on Thursday in the continued absence of any notable Eurozone economic data.
This left the Euro vulnerable to losses as the single currency’s negative correlation with the US Dollar (USD) saw it weaken amid a broad pick-up in the ‘Greenback’.
Looking ahead, a virtual EU summit will be in the spotlight today as EU leaders discuss the European Commission’s plans for a €750bn coronavirus relief fund.
US Dollar (USD) Strengthened by Second Wave Fears
The US Dollar (USD) accelerated through yesterday’s trading session as growing concerns over a second wave of coronavirus infections benefitted the safe-haven ‘Greenback’.
Also supporting this uptick in USD exchange rates was the latest Philadelphia manufacturing index, which reportedly rebounded from –43.1 to 27.5 in June, easily besting forecasts for another negative reading of –23.
USD investors will be looking to a speech by Jerome Powell today. However, the Federal Reserve Chair may not have anything new to offer just days after his testimony in front of Congress.
Canadian Dollar (CAD) Supported by Positive Oil Prices
The Canadian Dollar (CAD) edged higher on Thursday as the appeal of the commodity-linked ‘Loonie’ was underpinned by a solid uptick in oil prices.
Australian Dollar (AUD) Undermined by State-Based Cyber Attack
The Australian Dollar (AUD) was left on the back foot overnight on Thursday amid reports that Australia’s government and institutions are being targeted by widespread ‘sophisticated’ state-based cyber hacks.
New Zealand Dollar (NZD) Slips in Risk-Off Trade
The New Zealand Dollar (NZD) also found itself retreating overnight, with investors shunning the risk-sensitive ‘Kiwi’ in response to coronavirus jitters and rising geopolitical tensions.