Pound (GBP) Rallies Despite Brexit and Unemployment Concerns
The Pound (GBP) enjoyed some bullish support through yesterday’s session. Sterling accelerated in spite of concerns over Brexit and a sharp fall in retail employment as Pound exchange rates against the Euro and US Dollar strengthened.
Analysts have accused GBP investors of growing complacent regarding the threat of a no-deal Brexit as talks show no sign of meaningful progress.
At the same time, markets appeared willing to shrug off data from the Confederation of British Industry (CBI) revealing that employment in the UK’s retail sector fell at its fastest pace in over a decade this month.
Coming up today, a speech by the Bank of England’s (BoE) Andy Haldane could provide more support to the Pound if he delivers a positive outlook on the UK’s economic recovery.
Euro (EUR) Supported by Positive German Data
The Euro (EUR) moved in a positive direction on Tuesday, supported by better-than-expected German GDP and economic sentiment releases.
These saw Germany’s GDP contraction in the second quarter revised lower, while the IFO business climate index rose from 90.4 to 92.6, its best level since February.
However, the Euro struggled against the bullish Pound as the GBP/EUR exchange rate edged slightly higher.
In the absence of any notable EUR data releases today, the Euro could struggle to extend its momentum, particularly in the face of growing concerns over Europe’s coronavirus resurgence.
US Dollar (USD) Slips amid Market Optimism
The US Dollar (USD) was on the defensive through yesterday’s trading session, with the appeal of the safe-haven ‘Greenback’ diminishing due to improving market sentiment.
This came on the back of easing trade tensions between the US and China as well as optimism over a potential coronavirus vaccine.
Turning to today’s session, the focus looks to be on the latest US durable goods release. Will another robust expansion in goods orders last month help to buoy the US Dollar this afternoon?
Canadian Dollar (CAD) Firms on Oil Rebound
The Canadian Dollar (CAD) edged higher on Tuesday, with the commodity-linked ‘Loonie’ being underpinned by a rebound in oil prices, which pushed WTI crude back above $43 a barrel.
Australian Dollar (AUD) Sidelined on Weaker Risk Tone
The Australian Dollar (AUD) was stuck in a narrow range overnight on Tuesday as investors began to limit their bets on the risk-sensitive currency ahead of the Federal Reserve’s Jackson Hole Symposium later in the week.
New Zealand Dollar (NZD) Muted on Softening Risk Appetite
The New Zealand Dollar (NZD) was also rangebound in overnight trade, with softening market risk appetite leaving the ‘Kiwi’ without any strong directional bias.