Pound (GBP) Boosted by Brexit and Vaccine Hopes
The Pound (GBP) strengthened through Friday’s session as optimism continued growing for a UK-EU post-Brexit trade deal following reports from an EU official that an agreement is ‘very close’.
Sterling received further support earlier in Friday’s session from a surprise jump in October’s retail sales, coming in at 1.2% on the month, instead of the 0% forecast.
With reports of AstraZenca’s coronavirus vaccine lifting market sentiment this morning, Sterling is making solid early gains on the optimism ahead of Boris Johnson’s announcement on England coming out of lockdown later today.
At the same time, November’s service and manufacturing PMIs were released this morning, will the contraction in business activity offset Brexit and vaccine optimism to weigh on GBP exchange rates?
Euro (EUR) Weakens ahead of Eurozone PMIs
The Euro (EUR) weakened ahead of the weekend as the latest Eurozone consumer confidence index fell further into negative territory in November.
With coronavirus cases continuing to surge in Europe as they passed the 15 million mark at the weekend, concerns persist over the bloc’s economic recovery.
Starting today’s session is the Eurozone’s November flash PMIs publication, where slowing manufacturing growth and a worse-than-expected contraction in the service sector will likely add to pressure on the Euro.
US Dollar (USD) Struggles as Vaccine Hopes Lift Market Mood
The US Dollar (USD) slipped on Friday as market risk appetite picked up ahead of the weekend on news of widespread vaccine distribution.
Worryingly high increases in coronavirus cases and tighter restrictions across the US, including new curfews in California over the weekend, continue to cause concern for the US economic recovery.
Meanwhile, the ‘Greenback’ has come under further pressure this morning as news of another coronavirus vaccine has boosted risk-on trade, in turn weighing on safe-haven demand for the US Dollar.
Canadian Dollar (CAD) Boosted by Strong Retail Sales
The Canadian Dollar (CAD) made solid gains at the end of last week’s session as September’s retail sales came in better than expected.
Meanwhile, rallying oil prices gave the commodity-correlated ‘Loonie’ extra support as vaccine hopes lifted expectations for a rise in oil demand.
Australian Dollar (AUD) Strengthens as PMIs Beat Forecast
The Australian Dollar (AUD) ticked higher overnight as manufacturing and service PMI data both unexpectedly showed growth in November, while border restrictions eased between New South Wales and Victoria for the first time in months.
New Zealand Dollar (NZD) Soars to Two-Year High vs. USD
The New Zealand Dollar (NZD) surged to a two-year high against the US Dollar at the start of Monday’s Asian session as unexpectedly robust third quarter retail sales came in at 28%, up from -14.6%.