Pound (GBP) Sell-Off Intensifies
The Pound (GBP) stumbled over the finishing line last week, with the bearish pressure against the UK currency growing amidst speculation of additional monetary easing from the Bank of England (BoE) in the future.
This offset the publication of some upbeat UK retail sales, which reported sales growth rebounded strongly last month thanks to reopening of DIY stores and garden centres.
Looking to the week ahead, the Pound could recoup some of its losses if the UK’s latest PMI figures report a notable improvement in economic activity this month.
Euro (EUR) Muted as EU Leaders Discuss Coronavirus Fund
The Euro (EUR) was stuck in a narrow range during Friday’s European session as EUR investors remained wary of altering their positions in the currency ahead of an EU summit of leaders.
The summit itself failed to forge a compromise on the terms of the EU’s €750bn coronavirus recovery fund, which may exert some pressure on the single currency in early trade this week.
Also, in focus for EUR investors at the start of this week will be Eurozone’s own PMI figures, with the Euro likely to receive a boost if much of Europe reopening has helped to reenergize private sector growth.
US Dollar (USD) Muted as Market Mood Improves
The US Dollar (USD) was left mostly rangebound on Friday as demand for the safe-haven currency was stifled by an upbeat market mood.
This was not helped by Federal Reserve Chair Jerome Powell who warned ‘the path ahead for the US economy is likely to be challenging’ due to considerable coronavirus uncertainty.
For USD investors, the focus this week will be on the latest US durable goods orders, with a rebound in order growth last month likely to propel the US Dollar higher.
Canadian Dollar (CAD) Strengthens amidst Bullish Oil Prices
The Canadian Dollar (CAD) closed last week’s session on a high, with the commodity-linked currency strengthening as WTI crude prices climbed back above $40 a barrel.
Australian Dollar (AUD) Rallies Despite Lowe’s Dovish Speech
After fluctuating at the end of last week, the Australian Dollar (AUD) has started this week’s session on solid footing, with an upbeat market mood helping to lift the risk-sensitive ‘Aussie’ despite some dovish comments from Reserve Bank of Australia (RBA) Governor Philip Lowe.
New Zealand Dollar (NZD) Strengthens in Risk-On Trade
The New Zealand Dollar (NZD) is also making tentative gains this morning as a modest improvement in market sentiment helps to buoy the appeal of the ‘Kiwi’.