Today’s Exchange Rate News: GBP/USD Exchange Rate Strikes Three-Week High Following UK Supplementary Budget

Pound (GBP) Steady Following UK’s Supplementary Budget

The Pound (GBP) remained stable through Wednesday’s trading session as markets reacted to the announcement of Rishi Sunak’s new stimulus measures.

While investors welcomed the Chancellor’s efforts to help limit job losses, they appeared a little disappointed that he didn’t take more radical steps, limiting the upside in Sterling.

Turning to the second half of the week, we may see GBP exchange rates face some headwinds as the latest round of Brexit talks are set to conclude, with little hope for a breakthrough.

Euro (EUR) Bolstered by ECB Optimism

The Euro (EUR) drifted higher on Wednesday, accelerating on the back of optimistic comments from European Central Bank (ECB) Vice President Luis De Guindos on the prospects for economic growth in the Eurozone given the recent improvement in data.

However, these gains were tempered by comments from European Council President Charles Michel who warned a lot more work needs to be done before the EU will be able to reach an agreement on the €750bn coronavirus recovery fund.

In the meantime, the Euro looks to have found some support this morning as Germany’s latest trade figures revealed a sharp rebound in exports in May.

US Dollar (USD) Slips Despite Coronavirus Concerns

The US Dollar (USD) retreated against the majority of its peers yesterday, amidst some fresh selling pressure.

This drop in demand for the safe-haven ‘Greenback’ came in spite of ongoing worries over the recent spike in coronavirus cases and fears a second wave of infections may be approaching.

Coming up, the spotlight today is likely to be on the latest US initial jobless claims as investors look for any signs that the recent spike in US coronavirus cases and re-imposing restrictions in many states could have prompted a notable increase in unemployment last week.

Canadian Dollar (CAD) Steady amidst Modest Uptick in Oil Prices

The Canadian Dollar (CAD) held its ground yesterday, with the commodity-linked ‘Loonie’ underpinned by a modest rise in oil prices.

Australian Dollar (AUD) Stumbles on Weak Chinese Data

The Australian Dollar (AUD) trended lower overnight on Wednesday, as the appeal of the China-proxy ‘Aussie’ was undermined as China recorded another month of sustained deflation in factory-gate prices.

New Zealand Dollar (NZD) Subdued on Coronavirus Concerns

The New Zealand Dollar (NZD) also edged lower overnight, with the growing number of global coronavirus cases prompting skittish investors to shun the risk-sensitive ‘Kiwi’.

Matthew Andrews

Contact Matthew Andrews