Pound (GBP) to US Dollar Rallies as Downing Street Rejects PM Resignation Rumours
The Pound to US Dollar shot higher during yesterday’s session, with GBP/USD hitting $1.32, while the Pound to Euro exchange rate also strengthened.
This came as Downing Street rejected reports that Boris Johnson might step down in six months as he struggles with the lingering effects of the coronavirus.
This helped to offset fresh Brexit jitters for fears the recent resignation of EU Trade Commissioner Phil Hogan could delay Brexit talks.
Meanwhile, any movement in the Pound may prove limited through today’s session as GBP investors brace for a speech from BoE Governor Andrew Bailey on Friday.
Euro (EUR) Undermined by Coronavirus Concerns
The Euro (EUR) was on the defensive on Wednesday, with investors remaining wary of the single currency amidst Europe’s coronavirus resurgence.
Also weighing down on the Euro were comments from the European Central Bank’s (ECB) Isabel Schnabel, who lauded the success of the bank’s negative interest rate policy but hinted more easing may be needed.
In the absence of any notable EUR economic data today, could we see coronavirus concerns extend the downside in the Euro?
US Dollar (USD) Buoyed by Strong Durable Goods Release
The US Dollar (USD) trended higher through yesterday’s trading session as USD investors welcomed the publication of stronger-than-expected US durable goods order figures.
However, USD dropped against GBP and mixed versus the Euro as the Pound to US Dollar exchange rate tests multi-month highs.
Wednesday’s releases revealed that goods order growth jumped from 7.7% to 11.2% in July, easily outpacing expectations of a more modest 4.3% expansion and stoking expectations for the US economic recovery in the third quarter.
However, the US Dollar’s gains were also tempered somewhat by USD investors reluctance to place any aggressive bets ahead of Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium later today.
This could see USD exchange rates weaken this afternoon, amid speculation Powell will indicate the Fed will allow inflation to run hotter for longer.
Canadian Dollar (CAD) Firms as Oil Prices Hold at Five-Month High
Canadian Dollar (CAD) exchange rates edged higher on Wednesday, with the appeal of the oil-sensitive ‘Loonie’ bolstered as expectations of major shutdowns in response to Hurricane Laura enabled WTI crude to hold at a five-month high.
Coming up, the focus for CAD investors today will be on a speech by Bank of Canada (BoC) Governor Tiff Macklem as part of the Fed’s Jackson Hole Symposium.
Australian Dollar (AUD) Muted in Quiet Trade
The Australian Dollar (AUD) traded in a narrow range overnight on Wednesday, with investors steering clear of the risk-sensitive ‘Aussie’ ahead of the Jackson Hole Summit.
New Zealand Dollar (NZD) Ticks Higher after Dipping into Oversold Territory
The New Zealand Dollar (NZD) rallied during today’s Asian trading session, with investors seeking a bargain flocking to the ‘Kiwi’ amid suggestions it had entered oversold territory.