Pound to US Dollar Subdued on Brexit Uncertainty
The Pound (GBP) struggled to find support at the end of last week’s session as Brexit uncertainties ensured that demand remained limited.
This left the Pound to US Dollar exchange rate holding at key resistance levels, and the Pound weakening against the Euro.
Further keeping a lid on Sterling was the publication of the UK’s latest PMI release, which revealed a slowing of economic activity in October, particularly in the service sector which was hit hardest by coronavirus restrictions.
Looking ahead, GBP exchange rates will remain highly sensitive to even the most minor update on the state of Brexit talks, with plenty of upside potential in the Pound should any positive headlines emerge.
Euro (EUR) Strengthens on Bumper German Manufacturing Figures
The Euro (EUR) was seemingly bolstered by some strong manufacturing data from Germany on Friday as the country’s factory PMI flew past expectations in October.
However, the Eurozone PMIs made for gloomier reading, with the upside in the Euro capped as coronavirus restrictions resulted in activity in the private sector contracting for the first time since June.
Turning to the week ahead, the focus for EUR investors will be undoubtedly be on the Eurozone’s third quarter GDP estimate. But will a rebound in growth in the previous quarter be enough? Given the Eurozone likely faces more trouble ahead.
US Dollar (USD) Steadies on Bumper PMI Reading
The US Dollar (USD) initially stumbled at the end of last week’s session, with demand for the safe-haven currency weakening as market risk sentiment was buoyed after the US approved an antiviral drug for the treatment of coronavirus.
However, the ‘Greenback’ was able to recoup these losses during the US trading session after the latest US PMI survey reported that domestic business activity struck a 20-month high in October.
Meanwhile, all eyes will be on the publication of the latest US GDP figures. Will a strong rebound in the world’s largest economy in the third quarter offer more cheer to markets?
Canadian Dollar (CAD) Left Muted as Oil Prices Remain Flat
The Canadian Dollar (CAD) was mostly rangebound on Friday as stalling oil prices and the absence of any notable CAD data releases offered little direction to the commodity-linked ‘Loonie’.
Australian Dollar (AUD) Dives in Risk-Off Trade
After strengthening on Friday, the Australian Dollar (AUD) opens this week on the back foot, with demand for the risk-sensitive ‘Aussie’ being dented as coronavirus concerns and US political uncertainty sours the market mood.
New Zealand Dollar (NZD) Weakens on Coronavirus Concerns
The New Zealand Dollar (NZD) has also fallen foul of deteriorating market sentiment at the start of this week, with the ‘Kiwi’ tumbling amid fears the second wave of coronavirus is set to severely impact the global recovery.