Today’s Currency News: Pound to US Dollar Firms as UK Outlines Job Support Scheme, GBP/EUR Exchange Rate Touches Week High

Pound (GBP) Bolstered by New Job Protection Scheme

Pound (GBP) exchange rates ticked higher through yesterday’s trading session, pushing GBP/EUR to a one-week high and Pound to US Dollar consolidating at $1.27.

The Pound received support as GBP investors welcomed Chancellor Rishi Sunak’s announcement of the Jobs Support Scheme.

The new scheme will replace the furlough scheme and will see the government continue to top up the wages of workers who have been unable to return to the workplace full-time, cheering Sterling sentiment on hopes it will help avoid an unemployment crisis.

Looking ahead, while relief over the government’s new jobs scheme may lend some support to GBP exchange rates today, any additional upside in the Pound appears limited amid fears for additional restrictions that would further impact the UK economy.

However, GBP exchange rates are slipping this morning following data highlighting the surge in UK borrowing. The Pound to US Dollar exchange rate is weakening, while GBP/EUR is steady at €1.09.

 

Euro (EUR) Slips on Coronavirus Woes

The Euro (EUR) trended lower again on Thursday as the single currency continued to fall victim to concerns over Europe’s spike in coronavirus cases and its impact on growth in the region.

These concerns over growth in the bloc were accentuated by a disappointing German IFO survey, with business sentiment rising at a slower pace than expected in September.

In the absence of any notable EUR data releases today, Europe’s coronavirus resurgence is likely to continue to dominate headlines, likely extending the pressure on the single currency.

 

US Dollar (USD) Rallies in Risk-Off Trade

The US Dollar (USD) struck higher again on Thursday as investors continued to favour safe-haven assets in light of growing concerns over the resurgence of the coronavirus and its impact on the global recovery.

However, these gains were tempered by the publication of the latest US jobless claims as new claims rose faster than expected last week.

Coming up, the focus of today’s trading session looks to be on the latest US durable goods order figures. This could see demand for the US Dollar dented if order growth is shown to have slowed last month.

Ahead of the this afternoon’s US data release, USD is strengthening this morning. The US Dollar to Euro exchange rate is close to its eight-week high, rising at €0.85 while the Dollar to Pound is steady at £0.78.

Canadian Dollar (CAD) Undermined by Slide in Oil Prices

The Canadian Dollar (CAD) was on the back foot through yesterday’s trading session, with the commodity-linked currency retreating in response to a drop in oil prices.

 

Australian Dollar (AUD) Makes Modest Recovery on Improved Sentiment

The Australian Dollar (AUD) made modest gains overnight after a slight improvement in risk sentiment after a slight recovery in equity markets prompted some profit taking in the US Dollar.

Added to this, reports of US Congress working on a coronavirus stimulus package and the Australian government signalling it intends to eases lending standards helped to lift AUD exchange rates.

 

New Zealand Dollar (NZD) Makes Gains despite Week’s Losses

The New Zealand Dollar (NZD) also ticked higher overnight on the slight improvement in sentiment as coronavirus restrictions in New Zealand continued easing.

Matthew Andrews

Contact Matthew Andrews


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