Pound (GBP) Slips from Two-Month High
The Pound (GBP) sought to extend its advance on Tuesday morning, supported by lingering coronavirus vaccine optimism and hopes for a UK-EU Brexit trade deal.
But this optimism soon started to fade, with Sterling quickly retreating from its best levels on speculation over what will happen with the end of lockdown next month, and what tier parts of the England will be placed in.
This left the Pound to Euro exchange rate falling away from its two-month high, while GBP/USD managed to hold at $1.33.
Looking ahead, the spotlight today will be on Chancellor Rishi Sunak as he begins laying out his plans for a post-coronavirus economy in his 2020 Spending Review. The review, alongside the latest forecasts from the Office for Budget Responsibility (OBR) will be a key impetus in GBP exchange rates today.
Euro (EUR) Undermined by Slump in German Business Sentiment
The Euro (EUR) started on a strong footing yesterday, after Germany’s finalised GDP figures saw growth revised slightly higher in the third quarter.
However, these gains quickly began to fade with the publication of Germany’s latest IFO surveys, as a fall in business morale stoked concerns Europe’s largest economy will begin to contract again in the final quarter of 2020.
Turning to today’s session the focus will be on the European Central Bank’s (ECB) financial stability review. Will a gloomy assessment and warnings over the vulnerabilities exposed by the coronavirus pandemic put pressure on the Euro this morning?
US Dollar (USD) Fluctuates as Presidential Transition Formally Begins
The US Dollar (USD) initially fell back yesterday, with the news that Trump had finally accepted that the transition to the Biden presidency must begin, helping to cheer markets and undermine the appeal of the safe-haven ‘Greenback’.
However the US Dollar was quick to recoup these gains going into the US trading session, suggesting the US currency may have drifted into oversold territory.
Coming up later today, the publication of the latest US durable goods figures could exert some pressure on the US Dollar as economists forecast goods orders will have slowed in October.
Canadian Dollar (CAD) Rangebound despite Rising Oil Prices
The Canadian Dollar (CAD) struggled to find support on Tuesday, with the oil-sensitive ‘Loonie’ failing to advance in spite of US crude prices advancing to a three-month high.
Australian Dollar (AUD) Stumbles as Housing Data Disappoints
The Australian Dollar (AUD) trended lower overnight on Tuesday, as a larger-than-expected contraction in domestic construction work done in Q3 prompted some profiting taking in the ‘Aussie’.
New Zealand Dollar (NZD) Steady on RBNZ Expectations
The New Zealand Dollar (NZD) remained well supported in overnight trade as a potential change to the Reserve Bank of New Zealand’s (RBNZ) remit has been interpreted by the market as likely dissuading the RBNZ from further monetary easing.