Pound (GBP) Bolstered Following Cummings’ Exit
The Pound (GBP) closed last week’s session with some modest gains on the hopes that the exit of Boris Johnson’s chief advisor Dominic Cummings will dampen appetite for a no-deal Brexit in the UK government.
This coincided with the confirmation that Brexit talks will resume this week despite the mid-November deadline being missed, which further helped bolster Sterling sentiment.
Turning to this week’s session, it’s likely we will see Brexit developments dominate movement in GBP exchange rates, with the Pound poised to surge if a UK-EU trade deal can be reached before the upcoming EU summit.
Euro (EUR) Steady as European Coronavirus Cases Begin to Flatten
Trade in the Euro (EUR) was robust on Friday as signs that new coronavirus infections across Europe are beginning to flatten offered some relief to EUR investors.
However, the single currency was unable to translate this into any major gains after the latest Eurozone GDP estimate saw growth in the bloc revised slightly lower in the third quarter.
Looking ahead, the focus for EUR investors this week is likely to remain on Europe’s coronavirus situation, and whether the continent has truly turned the corner in terms of infections.
US Dollar (USD) Muted as US Consumer Confidence Drops
The US Dollar (USD) was placed on the back foot at the end of last week’s session following the publication of the University of Michigan’s latest US consumer sentiment index.
This revealed a surprise fall in consumer sentiment this month, with the index sliding from 81.5 to 77, driven by rising coronavirus cases and US political uncertainty.
Coming up in the first half of this week will be the publication of the latest US retail sales figures. Will a sharp slowing of sales growth last month start to raise concerns over falling consumer demand?
Canadian Dollar (CAD) Subdued as Oil Prices Retreat
The Canadian Dollar (CAD) stumbled on Friday, with the commodity-sensitive ‘Loonie’ being undermined by an approximate 1% drop in US oil prices.
Australian Dollar (AUD) Strengthened by ASEAN Trade Deal
Having rallied on Friday, the Australian Dollar (AUD) maintained its upward trajectory at the start of this week, rising through Monday’s Asian session amidst optimism over a new China-backed trade deal signed at the latest ASEAN Summit.
New Zealand Dollar (NZD) Jumps in Risk-On Trade
The New Zealand Dollar (NZD) also struck higher in overnight trade, with the news of the ASEAN trade deal as well as lingering coronavirus vaccine optimism bolstering market risk appetite.