Pound (GBP) Surges on Hopes for a Sharp Rebound
The Pound (GBP) opened this week’s session on a high, soaring against the majority of its peers as the Bank of England’s chief economist, Andy Haldane, repeated his claims that the UK is undergoing a V-shaped recovery.
The surge came in spite of concerns over the UK’s worsening relations with China as Downing Street suspended its extradition treaty with Hong Kong in response to Beijing’s controversial national security law.
Coming up today, with the UK’s public borrowing figures forecast to highlight another massive increase in the public deficit, further gains in GBP appear limited.
Euro (EUR) Slips as EU Coronavirus Fund Deal Reached
The Euro (EUR) was steady on Monday, supported by hopes that EU leaders would find a compromise regarding the EU coronavirus recovery fund as talks stretched into a fourth day.
Ultimately, leaders reached a deal in overnight talks, something which is likely to prove supportive of EUR exchange rates going forward.
However, in the meantime the relief has prompted some profit taking in the Euro this morning as investors finally feel comfortable to capitalise on the single currency’s significant gains from last week.
US Dollar (USD) Muted amidst Coronavirus Vaccine Hopes
The US Dollar (USD) was left mostly rangebound through yesterday’s trading session, while demand for the safe-haven currency was tempered by new reports of progress toward a coronavirus vaccine.
This helped to offset concerns over the continued rise in global cases and growing geopolitical tensions which may have otherwise bolstered the ‘Greenback’.
In the absence of any notable data, any upside in the US dollar may remain limited today as vaccine optimism continues to buoy market sentiment.
Canadian Dollar (CAD) Slips on Weaker Oil Prices
The Canadian Dollar (CAD) ticked lower on Monday as a modest slide in oil prices undermined the appeal of the commodity-linked ‘Loonie’.
Australian Dollar (AUD) Firms as RBA Comfortable with Value of the ‘Aussie’
The Australian Dollar (AUD) trended higher overnight on Monday, in response to comments by Reserve Bank of Australia (RBA) Governor Philip Low.
Some analysts had speculated that the RBA may seek to talk down the ‘Aussie’ in light of its recent appreciation. However, RBA governor Philip Lowe was unconvinced suggesting the Australian Dollar is trading broadly in line with the fundamentals.
New Zealand Dollar (NZD) Buoyed by Market Optimism
The New Zealand Dollar (NZD) edged higher in overnight trade as improving market sentiment helped to bolster the risk-sensitive ‘Kiwi’.