Today’s Exchange Rate News: Pound Extends Losses as BoE Dampens Hopes for V-Shaped Recovery

Pound (GBP) Undermined by Bailey’s Warning on Recovery

The Pound (GBP) closed last week on a sour note, retreating in response to comments from Bank of England (BoE) Governor Andrew Bailey.

Bailey said that while the UK economy is starting to pick back up following the coronavirus lockdown, the recovery has so far been uneven and warned against hopes for a V-shaped recovery.

Looking to the week ahead, lingering Brexit jitters are likely to remain a key catalyst of movement, with the publication of the UK’s latest borrowing figures early in the week also likely to influence GBP exchange rates.

Euro (EUR) Gains as EU Summit in Focus

The Euro (EUR) shot higher again on Friday, unperturbed by some pessimism ahead of a critical EU summit to discuss the EU’s coronavirus recovery fund.

However, even after a full weekend of tense negotiations, EU leaders are yet to reach an agreement with talks now set to stretch into a fourth day.

This could weigh on the Euro at the start of this week’s session, particularly amidst warnings from Dutch Prime Minister Mark Rutte that talks are ‘close to failure’.

US Dollar (USD) Muted as US Consumer Sentiment Slips

The US Dollar (USD) struggled to find momentum at the end of last week’s session as US consumer confidence unexpectedly slipped.

Data provided by Michigan University revealed the recent uptick in sentiment reversed sharply this month, with the economic outlook likely deteriorating due to the recent spike in US coronavirus cases.

Turning to this week, it is likely USD investors will be keeping a close eye on US coronavirus statistics as well as any further tensions between the US and China

Canadian Dollar (CAD) Flat as Oil Prices Stall

The Canadian Dollar (CAD) held in a narrow range on Friday as demand for the commodity-linked ‘Loonie’ was limited as WTI oil prices stalled at $40 a barrel.

Australian Dollar (AUD) Dips as Risk Sentiment Weakens

The Australian Dollar (AUD) is struggling to find support at the start of this week, with demand for the risk-sensitive ‘Aussie’ weakening in early trade amidst rising concerns over the depths of the current global recession.

New Zealand Dollar (NZD) Undermined by Risk-Off Trade

The New Zealand Dollar (NZD) was also placed on the defensive during today’s Asian session, with the appeal of the ‘Kiwi’ being dented by coronavirus uncertainty and economic concerns.