Pound to US Dollar Hits Two-Month High on Brexit Deal Hopes

Pound (GBP) Supported by Brexit Optimism

The Pound (GBP) maintained an upward trajectory yesterday as hope the UK and EU are nearing a post-Brexit trade deal continued underpinning Sterling sentiment.

Offering additional support to GBP exchange rates was the UK’s consumer price index (CPI), with a print of 0.7% in October beating expectations and propelling domestic inflation to a three-month high.

Coming up, Brexit will likely remain the focus for GBP investors through today’s session ahead of the latest EU summit of leaders, in which the EU’s chief negotiator Michel Barnier is expected to give an update on talks.


Euro (EUR) Flat as Eurozone Remains in State of Deflation

The Euro (EUR) remained confined to a narrow range on Wednesday as the Eurozone’s finalised CPI figures for October confirmed that the bloc remained in a state of deflation, with a 0.3% contraction.

Movement in the single currency was further limited by the latest European coronavirus statistics as Germany reported deaths have risen to a seven-month high, whilst France passed the two million infections mark.

Turning to today’s session, a speech by European Central Bank (ECB) President Christine Lagarde may offer fresh impetus to EUR investors this morning, particularly if she makes any mention of expanding the bank’s stimulus programme.


US Dollar (USD) Undermined by Soaring US Coronavirus Infections

The US Dollar (USD) struggled for direction through yesterday’s trading session amid concerns over rocketing US coronavirus cases.

With infections rising at an alarming rate and hospitalisations jumping to a new record high of over 78,000, more states have been forced to start re-implementing restrictions.

Looking ahead, the focus for USD investors today will be on last week’s initial jobless claims, with the US Dollar potentially remaining under pressure if jobless figures remain elevated.


Canadian Dollar (CAD) Firms as Inflation Beats Expectations

The Canadian Dollar (CAD) ticked a little higher on Wednesday in response to Canada’s own CPI figures as they reported domestic inflation accelerated above expectations to strike a four-month high in October.


Australian Dollar (AUD) Slips Despite Upbeat Job Report                         

The Australian Dollar (AUD) trended lower overnight on Wednesday, with renewed risk-off trade pressuring the ‘Aussie’ in spite of Australia’s latest jobs figures reporting a surprisingly strong jump in employment growth last month.


New Zealand Dollar (NZD) Slumps in Risk-Off Trade

The New Zealand Dollar (NZD) also fell back in overnight trade, with rising concern over the coronavirus pandemic denting the appeal of the risk-sensitive ‘Kiwi’.

Matthew Andrews

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