Pound (GBP) Buoyed by Brexit Hopes
The Pound (GBP) ticked higher yesterday, with the currency finding support in response to growing hopes that the UK and EU will be able to reach a last-minute trade agreement.
While this optimism comes in spite of reports suggesting the two sides are still yet to reach an agreement over fishing rights and state aid, GBP investors appeared content that talks are still continuing.
Looking ahead, Brexit developments will remain a key focus for markets today, as will the UK’s impending lockdown.
Euro (EUR) Subdued amid Coronavirus Concerns
Trade in the Euro (EUR) was mixed on Tuesday, with the single currency surging against its main rival the US Dollar (USD) but struggling to find broader support.
This came as EUR investors continue to express their concern over Europe’s coronavirus resurgence, amidst expectations that stricter restrictions are still to come.
Coming up, the Euro could face some headwinds this morning as October’s finalised PMI figures are expected to confirm a worrying contraction in Eurozone economic activity at the start of the fourth quarter.
US Dollar (USD) Fluctuates amid Unclear Election Result
The US Dollar (USD) fell back during yesterday’s European trading session as optimism for a clear-cut result in the US presidential election dampened market demand for the safe-haven currency.
However, as votes started to be counted it quickly became clear that the election is far tighter than expected, which alongside fears that a final result will not be known for at least a few more days, fuelled a sharp rebound in the US Dollar.
The USD rally is expected to be extended through today’s session as well, as markets are unnerved by Donald Trump’s attempt to claim victory and his threat to contest the final result in court.
Canadian Dollar (CAD) Flat Despite Oil Rally
The Canadian Dollar (CAD) was mostly rangebound on Tuesday, with the commodity-linked ‘Loonie’ struggling to find direction in spite of a strong pick-up in oil prices.
Australian Dollar (AUD) Plunges amid Uncertainty
After making steady gains through Tuesday’s session, the Australian Dollar (AUD) found its support crumble overnight as news of an unclear US election prompted a sharp reversal in market sentiment, leaving the risk-sensitive ‘Aussie’ in the lurch.
New Zealand Dollar (NZD) Slumps in Risk-Off Trade
The New Zealand Dollar (NZD) also fell victim to a sell-off of risk assets in overnight trade, but was able to temper its losses somewhat after New Zealand’s latest labour report showed a slightly smaller-than-expected bump in the unemployment rate in the third quarter.