Pound (GBP) Soars Against Euro and US Dollar, breaking $1.30 USD Barrier
The Pound (GBP) roared higher during yesterday’s session, even breaking through a key barrier of resistance against the US Dollar (USD).
However, this was more about the weakness of its peers than a story of Sterling strength, with the Pound’s gains tempered by lingering Brexit uncertainty.
This trend is likely to be repeated through to the end of this week’s session. In the absence of any notable UK data, market sentiment and movement will drive GBP exchange rates.
Euro (EUR) Tumbles Against Pound on Gloomy German GDP
The Euro (EUR) fell back on Thursday following Germany’s latest GDP estimate, amidst a faster-than-expected decline in growth.
These revealed the Eurozone’s largest economy suffered a record 10.1% slump in growth in the second quarter and sank it into an even deeper recession than previously feared.
Adding to the pressure, Germany’s consumer price index unexpectedly slipped into a state of deflation in July, further weighing on Euro exchange rates.
Coming up, we could see the Euro face additional pressure today if Germany’s larger-than-expected contraction is reflected in the Eurozone’s preliminary GDP figures later this morning.
US Dollar (USD) Retreats as US GDP Plummets, Losses Against EUR and GBP
The US Dollar (USD) also sank lower yesterday after the release of the latest US GDP figures.
These revealed that the US economy shrank a record 32.9% on an annualised basis in the second quarter, slightly above expectations for a 34.1% contraction.
Looking ahead, the focus for USD investors at the end of this week will be on the latest PCE price index. Will an improvement in the Federal Reserve’s favoured measure of inflation reflect well on the US Dollar?
Canadian Dollar (CAD) Nosedives as Oil Prices Crumble
The Canadian Dollar (CAD) fell sharply on Thursday, with investors shunning the oil-sensitive ‘Loonie’ as WTI crude prices retreated over 2%.
However, CAD exchange rates may bounce back later this afternoon as Canada’s latest GDP figures forecast to show a strong rebound in economic growth in May.
Australian Dollar (AUD) Struggles amid Risk Aversion
The Australian Dollar (AUD) struggled to find direction overnight on Thursday as rising concerns over the coronavirus resurgence as well as uncertainty over additional US fiscal stimulus weighed on market sentiment.
New Zealand Dollar (NZD) Dented by Cautious RBNZ
The New Zealand Dollar (NZD) edged lower overnight, retreating in response to some cautious comments by the Reserve Bank of New Zealand’s (RBNZ) Deputy Governor Geoff Bascand.