Today’s Exchange Rate News: GBP/USD Slips on Profit Taking despite Chancellor’s New Job Support

GBP Subdued as Sunak Outlines New Job Support Measures, Pound US Dollar Falls

Having rocketed into overbought territory on Thursday, the Pound (GBP) fell victim to some profit taking yesterday as Brexit talks got back underway in London.

This left the Pound US Dollar exchange rate a cent lower, while the Pound to Euro traded in a narrow range.

However, this Pound selling was tempered by Chancellor Rishi Sunak’s announcement of additional support for jobs hit by coronavirus restrictions, with observer’s hopeful the more generous scheme will help more to avoid an unemployment crisis in the UK this winter.

Looking ahead to today’s session, in addition to restarted Brexit talks, the focus for GBP investors will be on the UK’s latest PMI releases where a slowing of economic activity this month could undermine the Pound.

 

Euro (EUR) Dented by Coronavirus Concerns

The Euro (EUR) found itself on the defensive on Thursday as the latest coronavirus statistics from Europe made for some dire reading.

These saw Germany report a record rise in daily cases, whilst France passed the one million mark in total cases. The alarming statistics fuelled speculation that the bloc is likely to face even stricter restrictions in the days to come.

In the spotlight today will be the Eurozone’s latest PMI figures. These could place some significant pressure on the Euro this morning as growth in the bloc’s private sector contracted this month as a result of increasingly strict coronavirus restrictions.

 

US Dollar (USD) Firms on US Stimulus Doubts

After tumbling on Wednesday, the US Dollar (USD) sought to claw back some ground during yesterday’s trading session, aided by renewed risk aversion amidst ongoing concerns over US stimulus talks.

While US House of Representatives Speaker Nancy Pelosi suggested a bill may be ready before election day, markets were unconvinced given widespread opposition from Republicans for a large stimulus package.

Coming up, while not as influential as the ISM release, today’s Markit PMI’s could offer some direction to the US Dollar later this afternoon, particularly if economic activity remained robust this month.

 

Canadian Dollar (CAD) Directionless as Oil Prices Flat

The Canadian Dollar (CAD) was mostly rangebound on Thursday, with the commodity-linked ‘Loonie’ struggling for direction as oil prices stalled at $40 a barrel.

 

Australian Dollar (AUD) Weakened by RBA Rate Cut Bets

The Australian Dollar (AUD) remained on the back foot overnight on Thursday, with the ‘Aussie’ undermined by rising bets that the Reserve Bank of Australia (RBA) will cut interest rates next month.

 

New Zealand Dollar (NZD) Dented by Inflation Miss

After enjoying some modest support on Thursday, the New Zealand Dollar (NZD) was stopped in its tracks overnight as New Zealand’s third quarter CPI figures reported a smaller-than-expected bump in inflation.

Matthew Andrews

Contact Matthew Andrews


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