Today’s Currency News and Forecast: Pound to US Dollar Exchange Rate Hits Year-High $1.34, EUR/USD at Two-Year High

GBP Mixed Following BoE Bailey Comments, Pound to US Dollar Pushing Two-Year High

Trade in the Pound (GBP) was mixed at the end of last week’s session in response to comments from Bank of England (BoE) Governor Andrew Bailey.

Speaking at the Federal Reserve’s Jackson Hole Summit, Bailey struck a dovish tone suggesting any monetary tightening is still a long way off and indicated negative interest rates remain a possibility.

However, GBP/USD continues to make gains with the Pound to US Dollar exchange rate hitting $1.34, a high this year and could continue to a two-year high.

Looking ahead, the focus for GBP investors today will be on the final release of last month’s manufacturing PMI release, which may support Sterling if it confirms UK factory activity rose to a two-year high.

 

Euro (EUR) Slips as European Countries Tighten Restrictions, EUR/USD at Two-Year High

The Euro (EUR) was on the defensive during Friday’s trading session following the announcement that a number of European countries were tightening coronavirus restrictions in order to deal with the recent resurgence of cases.

This included Germany where people have been instructed not to travel to high-risk countries or regions as a state official warned that ‘corona is fully back in Germany’.

Turning to today’s session, the publication of the Eurozone’s latest CPI figures will be in focus for EUR investors, with a slowing of inflation last month likely to weigh on the Euro.

 

US Dollar (USD) Rebounds from Lows on Positive Data

The US Dollar (USD) traded in a wide range at the end of last week’s session as concerns over the Federal Reserve’s policy shift were offset somewhat by some positive USD data releases.

Personal income and spending came in above expectations in July, bolstering hopes that the US coronavirus resurgence has not derailed the US economic recovery too much.

Coming up today, we could see the US Dollar seek to extend its recovery if the latest ISM manufacturing PMI reports an improvement in US factory activity last month.

 

Canadian Dollar (CAD) Slips as Canada Suffers Record Contraction

The Canadian Dollar (CAD) fell back on Friday, retreating in response to Canada’s latest GDP figures that revealed a record contraction of economic growth in the second quarter, which plunged the country into a recession.

 

Australian Dollar (AUD) Steady Following RBA Rate Decision

The Australian Dollar (AUD) held steady at the start of this week’s session after the Reserve Bank of Australia (RBA) maintained the status quo in its latest rate decision.

Coming up, Australia’s second quarter GDP release will be in focus later tonight. A recession looks inevitable, but will Australia’s lockdown contraction be less than initially feared?

 

New Zealand Dollar (NZD) Buoyed by Robust Chinese Factory PMIs

After falling at the end of last week, the New Zealand Dollar (NZD) began to tick higher overnight on Monday in response to some upbeat Chinese manufacturing data.

Matthew Andrews

Contact Matthew Andrews


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