Pound (GBP) Rallies on Brexit Deal Optimism
The Pound (GBP) roared higher at the start of this week’s session, with Sterling sentiment buoyed by renewed Brexit optimism. This pushed the Pound to Euro exchange rate up to €1.10 at a three-week high.
GBP investors were cheered by reports that talks are now entering their final stage and we could see the UK and EU reach a Brexit deal by the end of this week.
Further boosting the appeal of the Pound on Monday were comments from Bank of England (BoE) Deputy Governor Dave Ramsden, who downplayed speculation the bank could deploy negative rates imminently.
Turning to today’s session, Brexit is likely to remain a key catalyst of movement for GBP exchange rates as formal trade talks resume.
So far this morning, the Pound to Euro exchange rate is holding, while the Pound to US Dollar is steady at $1.28.
Euro (EUR) Flat as Lagarde Sounds Warning Over Eurozone Recovery
The Euro (EUR) was mostly rangebound through Monday’s trading session as European Central Bank (ECB) President Christine Lagarde issued a stark warning over the Eurozone’s economic recovery.
Lagarde warned that the impact of the coronavirus pandemic is still being felt across the bloc, with the Eurozone’s fragile recovery in risk of collapsing without more fiscal support.
Looking ahead, the Euro could face some pressure later this afternoon if Germany’s latest consumer price index reveals the Eurozone’s largest economy suffered another month of deflation in September.
USD Sheds Gains on Improving Risk-Sentiment, Pound to US Dollar Gains a Cent
After soaring last week, the US Dollar (USD) fell victim to some profit taking at the start of this week, amidst an improvement in market risk appetite.
Further denting the appeal of the US dollar was the continued deadlock in Congress over the next coronavirus relief package, and concerns its delay could undermine the US economic recovery.
Coming up later tonight, all eyes will be on the first televised presidential debate between Donald Trump and Joe Biden. Historically, the presidential election debates have injected notable volatility into USD exchange rates, and it’s safe to assume that tonight’s highly anticipated debate will be no different.
Canadian Dollar (CAD) Muted as Oil Prices Hold Steady
The Canadian Dollar (CAD) struggled to find support on Monday as stalling oil prices limited the appeal of the commodity-linked currency.
Australian Dollar (AUD) Firms on Coronavirus Vaccine Optimism
The Australian Dollar (AUD) ticked higher overnight on Monday, with the risk-sensitive currency striking higher on the back of hopes that a coronavirus vaccine may be ready sooner rather than later.
New Zealand Dollar (NZD) Buoyed by Risk-On Trade
The New Zealand Dollar (NZD) also strengthened in overnight trade as the improvement in market risk appetite helped to boost the appeal of the ‘Kiwi’.