Pound (GBP) Bolstered in Upbeat Trade
GBP exchange rates rocketed higher during yesterday’s trading session as Pound to Euro hit €1.12, while GBP/USD reached a nine-week high.
Sterling’s initial rally came on the back of stronger-than-expected wage growth figures despite the jobs report indicating rising unemployment and record redundancies.
This uptrend in GBP exchange rates was further underpinned by market optimism regarding Pfizer’s new coronavirus vaccine and Brexit, after the UK signalled at the start of the week that it is open to a compromise regarding fishing.
Back in focus today will be the ongoing trade negotiations between the UK and EU. Will a breakthrough this week propel Sterling even higher? Or will a lack of progress leave the Pound vulnerable to losses?
Euro (EUR) Sinks as German Economic Sentiment Tumbles
The Euro (EUR) retreated on Tuesday after Germany’s latest ZEW survey printed lower than expected this month, with economic sentiment slumping to its worst levels since the height of the first coronavirus outbreak in April.
Unsurprisingly, the plunge in morale comes as much of Europe re-entered lockdown, stoking the prospect of a double-dip recession in Germany and the wider Eurozone this winter.
Coming up today, the only event of note will be a speech by the European Central Bank’s (ECB) Christine Lagarde, with EUR investors looking for any remarks regarding the ECB’s outlook for the Eurozone economy in light of a possible coronavirus vaccine.
US Dollar (USD) Steady as Yields Fall
The US Dollar (USD) was mostly rangebound through yesterday’s trading session, with a pullback in US bond yields dampening demand for the ‘Greenback’.
USD exchange rates were also unable to find much direction from the latest JOLT’s job opening figures, amidst a modest dip in open positions in September.
Looking ahead, could we see concerns over President Trump’s refusal to concede the presidential election and unsubstantiated claims of fraud start to dampen risk appetite and bolster the appeal of the US dollar through the second half of the week?
Canadian Dollar (CAD) Underpinned by Robust Oil Prices
The Canadian Dollar (CAD) held steady on Tuesday, with the continued crude prices rally underpinning the oil-sensitive ‘Loonie’ following Monday’s news of a potential coronavirus vaccine.
Australian Dollar (AUD) Strengthens in Upbeat Trade
The Australian Dollar (AUD) ticked higher overnight on Tuesday, with the risk-sensitive ‘Aussie’ being bolstered by hopes for a coronavirus vaccine and also benefitting from a surge in its antipodean cousin the New Zealand Dollar (NZD).
New Zealand Dollar (NZD) Surges on Hawkish RBNZ Policy Statement
The New Zealand Dollar rallied sharply in overnight trade, appreciating around 1% in the wake of the Reserve Bank of New Zealand’s (RBNZ) latest policy meeting.
This saw the RBNZ deliver a relatively upbeat outlook as it left its monetary policy unchanged, with policymakers also hinting that negative interest rates are no longer on the cards.