Pound (GBP) Subdued as Government Warned about Second Wave
The Pound (GBP) was left mostly muted through yesterday’s trading session as UK health experts called for a review into government preparations for a second coronavirus wave.
The warning comes hot on the heels of Boris Johnson’s announcement that more businesses will be able to reopen 4 July with an easing of the 2m social distancing rule, a move which could see the lockdown reintroduced if it causes cases to spike again.
Coming up this month, Sterling may be offered some relief with the publication of the Confederation of British Industry’s (CBI) distributive trade index, which is expected to report an improvement in retail activity this month.
Euro (EUR) Sidelined by US Tariff Threat
The Euro (EUR) found itself rangebound on Wednesday as reports the US was preparing tariffs against the EU rattled EUR investors.
This saw the single currency unable to strengthen on the back of another improvement in business sentiment in Germany this month.
In the absence of any notable Eurozone data, the Euro may remain directionless today as EUR investors await more details on the US tariffs and the EU’s likely response.
US Dollar (USD) Bolstered by Transatlantic Trade Tensions
The US Dollar (USD) struck higher yesterday, following reports the White House is considering placing $3.1bn worth of tariffs on exports from the UK and EU.
The threat of an EU-US trade war over the summer, coupled with growing fears of a global resurgence of the coronavirus saw demand for the safe-haven ‘Greenback’ surge.
Looking ahead, we may see the US Dollar maintain its upward trajectory if this afternoon’s durable goods data confirms expectations for a rebound in US goods orders last month.
Canadian Dollar (CAD) Undermined by Sliding Oil Prices
The Canadian Dollar (CAD) drifted lower on Wednesday, as the appeal of the oil-sensitive ‘Loonie’ weakened after WTI crude broke a three-day winning streak and fell back below $40 a barrel.
Australian Dollar (AUD) Weakened by US-China Trade Tensions
The Australian Dollar (AUD) struggled to find support overnight on Wednesday as AUD investors were spooked by fresh US-China trade tensions after the White House threatened Beijing with tariffs in a row over US lobsters.
New Zealand Dollar (NZD) Tumbles in Risk-Off Trade
The New Zealand Dollar (NZD) also remained on the defensive overnight, with rising trade tensions and growing concerns for a second wave of coronavirus infections weighing on the risk-sensitive ‘Kiwi’.