Pound (GBP) Dips on Brexit Uncertainty
The Pound (GBP) ticked lower in mid-week trade, undermined by fresh Brexit anxiety after comments from the European Commission president, Ursula von der Leyen, cast doubt on the prospects of a UK-EU trade deal.
At the same time, Chancellor Rishi Sunak published his 2020 Spending Review yesterday, warning that the UK’s economic emergency has only just begin.
Looking ahead, it’s clear that Brexit will remain the key catalyst of movement for the Pound through the second half of the week, likely resulting in more pressure if trade talks remain at an impasse.
Euro (EUR) Firms despite ECB Concerns
The Euro (EUR) edged higher on Tuesday, benefiting from a modest pullback in the US Dollar (USD) and advancing in spite of some concerns from the European Central Bank (ECB) over the state of the Eurozone economy.
ECB policymaker Yves Mersch told the Financial Times that it will be ‘difficult to maintain positive growth’ in Q4, while the ECB’s latest Financial Stability Review warned countries against withdrawing financial support too soon for risk of ‘setting back the economic recovery’.
Coming up, the only event of note on today’s data calendar will be the publication of the minutes from the European Central Bank’s (ECB) latest policy meeting, with EUR investors looking for any hints into how much easing we could see from the bank next month.
US Dollar (USD) Muted on Mixed Data
The US Dollar (USD) was mostly rangebound through yesterday’s session in response to some mixed US economic releases.
This saw the publication of a surprising jump in initial jobless claims last week offset a stronger-than-expected durable goods order release.
Turning to today’s session, movement in the US Dollar could prove limited as the closure of US markets for Thanksgiving is likely to result in some thin trading conditions in the world’s reserve currency.
Canadian Dollar (CAD) Steady as WTI Crude Tops $45
The Canadian Dollar (CAD) traded steadily through Wednesday’s trading session, with the commodity-linked ‘Loonie’ benefitting from another uptick in oil prices.
Australian Dollar (AUD) Gains on USD Weakness
The Australian Dollar (AUD) rallied overnight on Wednesday, with the risk-sensitive ‘Aussie’ being bolstered by a broad drop in the US Dollar (USD) at the start of the Asian session.
New Zealand Dollar (NZD) Extends Positive Run
The New Zealand Dollar (NZD) trended higher again in overnight trade, with the ‘Kiwi’ continuing to be bolstered by speculation that a change to the Reserve Bank of New Zealand’s inflation remit will result in the bank tightening its monetary policy.