Pound (GBP) Plunges amid No-Deal Brexit Fears
The Pound (GBP) tumbled at the start of the week, coming under significant selling pressure as the outlook for UK-EU trade talks grew darker, with the odds of a trade deal seemingly falling.
UK media reported that Boris Johnson is close to walking away from negotiations due to new demands from the EU, while the EU mood was described as gloomy.
However, with talks set to continue until at least Wednesday, there is at least some chance of a deal being found, which should help to cap the GBP sell-off in the coming days.
Euro (EUR) Bolstered by Upbeat German Data
The Euro (EUR) also suffered due to Brexit uncertainty on Monday, which saw the single currency slip through the first half of the European session.
However, the Euro was able to recover its bullish potential later in the day, aided by latest German industrial production figures as EUR investors welcomed a larger-than-expected expansion in factory output in October.
Coming up, the focus for EUR investors this morning will be on the latest ZEW surveys. Will a deterioration of economic sentiment this month push the Euro lower this morning?
US Dollar (USD) Fumbles Initial Gains
After plunging through last week’s session, a risk-off mood in light of the latest Brexit developments helped the US Dollar (USD) find some support yesterday morning.
But this bump proved short-lived, with the ‘Greenback’ paring its early gains, as the USD bears remain in full control amidst ongoing concerns over surging US coronavirus cases.
Looking ahead, the direction of USD exchange rates today will largely depend on market sentiment, with the US Dollar likely making some more tentative gains if the downbeat mood persists.
Canadian Dollar (CAD) Undermined by Sliding Oil Prices
The Canadian Dollar (CAD) trended lower on Monday, as a modest drop in oil prices undermined the appeal of the commodity-linked ‘Loonie’.
Australian Dollar (AUD) Slips in Risk-Off Trade
The Australian Dollar (AUD) fell back overnight on Monday, as renewed concerns over surging coronavirus cases and the potential damage to the global economy in the fourth quarter weighed on market sentiment, dampening demand for the risk-sensitive ‘Aussie’.
New Zealand Dollar (NZD) Stumbles amid Souring Market Mood
The New Zealand Dollar (NZD) also fell on the deteriorating market mood in overnight trade, leaving the ‘Kiwi’ to shed the gains made during Monday’s US trading session.