Will Pound hit $1.30 against USD? GBP Rises on Upbeat Retail Figures: Exchange Rate News Today

Pound (GBP) Strengthens as Retail Sales Jump

Pound (GBP) exchange rates went higher against most of its peers yesterday as upbeat comments from the EU’s chief negotiator, Michel Barnier, led to some optimism over a UK-EU Brexit deal later in the year.

Sterling also received support from far stronger-than-expected Confederation of British Industry (CBI) data indicating the UK’s retail sector is rebounding to near pre Covid-19 levels.

Looking ahead, the Pound could continue to strengthen today as economic data over the last week shows the UK is recovering and optimistic signs in Brexit negotiations.

Euro (EUR) Slips from Two-Year High Against USD

The Euro (EUR) to Pound exchange rate slipped during yesterday’s session but held steady against most other currencies.

With a quiet day of data in the Eurozone, the main news weighing on the Euro was the jump in Spanish unemployment. In the second quarter the unemployment hit a two-year high of 15.3% as one million jobs were lost due to the coronavirus lockdown.

Looking ahead, consumer confidence data in France may give an indicator of recovery in the Eurozone, while the Euro could slip further as the US Dollar attempts to claw back some of the week’s losses.

US Dollar (USD) Attempts to Claw Back Losses as Fed in Focus

The US Dollar (USD) made some modest gains yesterday as it attempted to claw back losses from its near two-year low, with the Dollar index rising slightly, although it remains down in July.

However, the US Dollar appears to be struggling again this morning as July looks as if it could be the ‘Greenback’s worst month in nearly a decade.

The Federal Reserve interest rate decision and meeting later today may drive some movement in the US Dollar, although it is likely the Fed will remain in a ‘wait and see’ mode.

Further adding to the US Dollar’s unpredictability through the rest of the week is Friday’s deadline for Congress to extend its unemployment benefits and fiscal stimulus. While the stimulus package is held up, it is likely to continue weighing on USD.

Canadian Dollar (CAD) Slips on Oil Demand Uncertainty

The Canadian Dollar (CAD) weakened slightly yesterday but remains near its 6-week highs against the US Dollar.

Oil prices held steady but have since dropped overnight, caused by oil demand worries as coronavirus cases continue to rise around the world, which weighed on the ‘Loonie’.

Looking ahead, the Canadian Dollar will be sensitive to the US fiscal stimulus support package, which is may cause movement in oil prices and in turn CAD exchange rates.

Australian Dollar (AUD) Limited as Attention Turns to US

The Australian Dollar (AUD) was limited on Tuesday as attention turned to the US Federal Reserve’s policy meeting and USD’s modest gains.

However, a slightly better-than-expected inflation rate reading this morning, although still negative at -0.3% offered some support. Added to this, the US Dollar seems to be retreating again which has allowed the Australian Dollar to stay close to its 15-month highs against USD.

Looking ahead, it is likely AUD will move with market sentiment today ahead of building permits data later.

New Zealand Dollar (NZD) Slumps After Hitting Eight-Month High

The New Zealand Dollar (NZD) rallied to an eight-month high against the US Dollar before retreating and is trading in a narrow range this morning.

Meanwhile, it is likely NZD will shift with market sentiment through today as the US awaits fiscal stimulus measures.

Matthew Andrews

Contact Matthew Andrews