GBP Strengthens on Stimulus Expansion, Pound to US Dollar Buoyed
GBP exchange rates struck higher through yesterday’s trading session, with the Pound to US Dollar hitting $1.31.
Sterling rallied on the back of the Bank of England’s (BoE) decision to expand its quantitative easing programme by an additional £150bn.
This was larger than the £100bn forecast by most economists, which alongside the BoE’s decision to keep quiet on the issue of negative interest rates, helped to bolster Sterling sentiment.
However, it remains to be seen if the Pound can sustain these gains through to the end of the week amid ongoing concerns over the economic impact of England’s nationwide lockdown as well as a lack of progress in Brexit trade talks.
Euro (EUR) Undermined by Lacklustre Data, EUR/USD Hits Two-Week High
While the Euro (EUR) performed well against a weakened US Dollar (USD) on Thursday, with EUR/USD hitting a two-week high, it struggled to replicate this success against its other currency peers in response to some lacklustre Eurozone data releases.
Both German factory orders and Eurozone retail sales underperformed in September, with a 2% contraction in sales growth particularly worrying for EUR investors as a possible sign of things to come.
However, the Euro looks to be off to a better start this morning as the latest German industrial production figures revealed that factory output has now expanded for five consecutive months, following a revision to August’s figures.
US Dollar (USD) Retreats amid Election Hopes
The US Dollar (USD) tumbled yesterday, with the safe-haven appeal of the currency being dampened by signs that Joe Biden will secure a clear win in the US presidential election and he will be able to see off attempts to contest the result by Donald Trump.
Meanwhile, a dovish rate decision by the Federal Reserve, in which the US central bank left its monetary policy untouched and warned over the moderating pace of recovery, failed to inspire the ‘Greenback’.
Turning to today’s session and the focus may be back on the US economy, with the publication of the highly influential non-farm payroll report. Will a robust expansion in payroll numbers help to boost the US Dollar?
Canadian Dollar (CAD) Muted as Oil Fails to Break $40 Barrier
The Canadian Dollar (CAD) was left mostly rangebound through Thursday’s trading session, with the oil-sensitive ‘Loonie’ struggling to find momentum as US crude prices stalled below $40 a barrel.
Coming up later today, we may see the publication of Canada’s latest labour report provide a boost to CAD exchange rates if unemployment continued to fall as expected in October.
Australian Dollar (AUD) Dented by RBA Policy Statement
The Australian Dollar (AUD) edged lower overnight on Thursday as the Reserve Bank of Australia (RBA) noted risks to domestic growth in its quarterly Statement on Monetary Policy.
New Zealand Dollar (NZD) Buoyed by RBNZ Inflation Expectations
The New Zealand Dollar (NZD) trended higher overnight, rallying on the back of the Reserve Bank of New Zealand’s (RBNZ) latest inflation expectations as predictions for a rise in the fourth quarter helped to cut the odds of a rate cut from the RBNZ at next week’s policy meeting.