Pound (GBP) Firms as More UK Businesses Reopen
The Pound (GBP) to USD exchange rate edged higher on Friday, while GBP/EUR stayed flat. Pound exchange rates were buoyed by the prospect of a wider reopening of the UK economy over the weekend.
Bowling alleys, casinos, indoor theatres, and music and performance venues all resumed operations on Saturday, bolstering hopes for a strong return to growth in the third quarter.
Looking to the week ahead, Sterling could find itself giving up some ground with the release of the UK’s latest consumer price index. If inflation slows it will put more pressure on the Bank of England to explore unconventional monetary policy.
Euro (EUR) Flat on Larger-than-Expected Eurozone Employment Fall, EUR/USD Makes Modest Gains
The Euro (EUR) was rangebound at the end of last week’s session as the Eurozone’s latest employment figures printed below expectations. However, the Euro to US Dollar exchange rate managed some gains.
Eurostat reported that employment growth slumped 2.8% through the second quarter, larger than the 1.7% contraction forecast as the coronavirus crisis forced businesses to lay-off more workers than expected.
Kicking off this week, will we see a fall in the Euro in response to the recent spike of European coronavirus cases?
US Dollar (USD) Subdued in Upbeat Trade
The US Dollar (USD) also struggled to find momentum at the end of last week’s session as a positive market mood limited demand for the safe-haven ‘Greenback’.
This improvement in market sentiment was in part aided by the latest US economic releases, with another robust increase in retail sales last month lifting US consumer spending back to pre-pandemic levels.
Turning to this week, the publication of the minutes from last month’s Federal Open Market Committee (FOMC) meeting is likely to be in the spotlight for USD investors, as they look for any additional insight into the Federal Reserve’s outlook on monetary policy.
Canadian Dollar (CAD) Dips as Disappointing Chinese Data Weighs on Oil Prices
The Canadian Dollar (CAD) trended lower on Friday as softer oil prices limited the appeal of the commodity-linked ‘Loonie’.
Underwhelming economic data from China at the end of last week caused this dip in crude prices. These concerns also underpin the forecast for global oil demand in 2020.
Australian Dollar (AUD) Muted on Japan’s Gloomy GDP Figures
The Australian Dollar (AUD) is struggling for support at the start of this week. The Asian trading session dampened market risk appetite with the publication of Japan’s second quarter GDP figures, which revealed the world’s third largest economy suffered its worst contraction in 40 years.
New Zealand Dollar (NZD) Retreats as NZ Election Delayed
The New Zealand Dollar (NZD) was on the defensive at the start of this week. NZD exchange rates slumped after prime minister Jacinda Ardern postponed the upcoming election by a month following a resurgence of coronavirus cases in the country.