Pound (GBP) Rallies amidst Cautious Optimism
The Pound (GBP) maintained its upward trajectory yesterday, carried higher by some cautious optimism in markets in response to positive developments of a coronavirus vaccine.
However, this upside in Sterling proved limited in light of concerns over the UK’s handling of the coronavirus as well as doubts over Boris Johnson’s plans for a post-lockdown economic revival.
Turning to the second half of the week, GBP investors will be looking for a Brexit update from the UK and EU negotiating teams, with the Pound poised to tumble if they conclude that progress remains limited.
Euro (EUR) Subdued Despite Upbeat Data
The Euro (EUR) was left on the back foot through most of yesterday’s trading session, in spite of some positive Eurozone economic releases.
This included German retail sales which saw a record rebound in sales growth in May as well as the Eurozone’s latest manufacturing PMI, which was revised slightly higher in June.
Looking ahead, we may see the Euro remain on the back foot through today’s session as the Eurozone’s latest jobs report is expected to show a sharp rise in unemployment in May.
US Dollar (USD) Retreats amid Improving Market Mood
The US Dollar (USD) trended lower on Wednesday as an improving market mood weakened the appeal of the safe-haven currency.
This resulted in the ‘Greenback’ retreating despite the ISM manufacturing PMI beating expectations last month as well as specular revision to May’s ADP employment figures from –2.7m to +3m.
Coming up today, the focus looks to be on the latest US payroll report. Will another sharp rebound in US employment last month help shore up the US Dollar ahead of the long Independence Day weekend?
Canadian Dollar (CAD) Holds Steady as Oil Prices Rise
The Canadian Dollar (CAD) held its ground on Wednesday, with the commodity-linked currency underpinned by a modest bump in oil prices which saw WTI crude edge closer to $40 a barrel again.
Australian Dollar (AUD) Gains Tempered by PM Morrison’s Comments
The Australian Dollar (AUD) enjoyed some modest gains overnight on Wednesday in response to improving market sentiment.
However, these gains were ultimately capped in the wake of comments from Prime Minister Scott Morrison as he stoked tensions with China in announcing Australia is prepared to ‘step up and support’ citizens of Hong Kong.
New Zealand Dollar (NZD) Buoyed by Risk-On Trade
The New Zealand Dollar (NZD) also strengthened overnight, with the risk sensitive ‘Kiwi’ striking a one-week high amid a positive risk tone in markets.