Pound (GBP) Recovers Following Johnson’s ‘Ambitious’ Recovery Plan
The Pound (GBP) initially stumbled at the start of yesterday’s session as the UK’s final GDP release for the first quarter saw UK economic growth revised down from –2% to –2.2%.
Sterling was later able to pare these losses in response to a speech by Boris Johnson, in which the PM set out his post-coronavirus recovery plan and vowed to fix longstanding economic problems in the UK.
This set up the Pound for further gains towards the end of the European session as investors sought to correct their positions in the currency as June came to a close.
However, GBP exchange rates may come under renewed pressure through today’s session in light of flare ups of coronavirus cases in parts of the UK as well as ongoing Brexit uncertainty.
Euro (EUR) Buoyed by Stronger-than-Expected Inflation
The Euro (EUR) ticked higher on Tuesday, with the single currency supported by the Eurozone’s latest CPI figures as they revealed inflation in bloc rose to 0.3% in June.
This beat forecasts for a more modest 0.1% rise and fed recent optimism that the Eurozone economy is on track to recover in the third quarter.
Looking ahead, the Euro may be in line for additional gains today, after Germany reported a strong rebound in retail sales growth in May.
US Dollar (USD) Fluctuates as Coronavirus Concerns Dominate Markets
The US Dollar (USD) remained well supported through yesterday’s trading session as growing concerns over the resurgence of the coronavirus continued to funnel investors towards the safe-haven currency.
As US cases continue to rise at an alarming pace and more countries are reporting localised spikes, the risk of the world going back into lockdown are looking increasingly likely, undermining hopes for a rebound in global growth in the second half of the year.
Meanwhile, the focus for USD investors today will be on the latest ISM manufacturing PMI. Will the US Dollar rally in response to robust US factory activity last month?
Canadian Dollar (CAD) Weakens as Canada Suffers Record Fall in GDP
The Canadian Dollar (CAD) trended lower on Tuesday, in response to some gloomy GDP figures which revealed domestic growth slumped a record 11.6% during the month of April.
Australian Dollar (AUD) Rangebound amid Coronavirus Fears
The Australian Dollar (AUD) struggled to find momentum overnight on Tuesday, with demand for the risk-sensitive currency being undermined by concerns over the rising number of global coronavirus cases.
New Zealand Dollar (NZD) Muted amidst Risk-Off Trade
The New Zealand Dollar (NZD) also remained in a narrow range last night, with skittish investors steering clear of the ‘Kiwi’ as risk appetite continued to deteriorate.