Pound (GBP) Tumbles on Brexit and Unemployment Concerns
The Pound (GBP) nosedived at the end of last week’s session amidst renewed Brexit jitters. Sterling slipped against the Euro and the Pound US Dollar exchange rate plunged below $1.31.
This followed the conclusion of the latest round of UK-EU Brexit talks on Friday, with the EU’s chief negotiator, Michel Barnier, warning that the continued deadlock makes a post-Brexit trade deal ‘unlikely’.
Added to this, concerns rose over employment in the UK as the latest PMI figures highlighted the growing pace of job cuts, despite business activity in August expanding at its fastest pace in seven years.
In the absence of any notable economic releases, the Pound may struggle for direction this week, particularly if the focus remains on Brexit.
Euro (EUR) Slumps as Eurozone Recovery Stalls
The Euro (EUR) also found itself on the defensive on Friday, following the publication of the Eurozone’s own PMI releases.
Investors shunned the single currency as August’s preliminary figures printed well below expectations and indicated the Eurozone’s economic recovery may have stalled amid Europe’s coronavirus resurgence.
Looking ahead, the Euro could face additional pressure through the coming week, should Europe’s coronavirus situation continue to deteriorate.
US Dollar (USD) Bolstered by Upbeat Data Releases, Pound US Dollar pushed below $1.31
The US Dollar (USD) was the top performer at the end of last week’s session as USD demand rose in response to some positive US data releases. Added to this, weakness in GBP and the Euro sent the Pound US Dollar exchange rate plummeting, while EUR/USD dropped below $1.18.
US PMI figures and existing home sales both printed above expectations on Friday, allowing the ‘Greenback’ to gather strength and close the week on a high.
Coming up this week, we may see the US Dollar extend this bullish momentum if worries over global growth see investors continue to favour the safe-haven currency.
Canadian Dollar (CAD) Surges on Record Jump in Retail Sales
The Canadian Dollar (CAD) rallied on Friday, being carried higher on the back of some impressive domestic retail sales figures.
Sales growth soared by a record 23.7% in July as more lockdown restrictions were eased, which cheered CAD investors on hopes this points to a strong rebound in the economy in the third quarter.
Australian Dollar (AUD) Muted in Mixed Trade
The Australian Dollar (AUD) traded flatly during today’s Asian session, with concerns over the recent resurgence in global coronavirus cases offset by hopes for blood transfusion treatments in the US.
New Zealand Dollar (NZD) Slips on Poor Retail Sales Figures
The New Zealand Dollar (NZD) opens this week on the back foot, edging lower in early trade this morning after New Zealand’s latest retail sales figures revealed a larger-than-expected contraction of sales in the second quarter.