Pound (GBP) Fluctuates Following Latest Brexit Drama
The Pound (GBP) came under pressure yesterday morning after Boris Johnson warned that securing a Brexit trade deal is ‘looking very, very difficult’.
However, Sterling recovered most of its losses later in the session after the announcement that the UK and EU had come to an agreement on the implementation of the Brexit Withdrawal Agreement was seen as providing ‘positive momentum’ in trade talks.
Brexit headlines will no doubt continue to stoke volatility in GBP exchange rates today as Johnson prepares to meet with European Commission President Ursula von der Leyen for further Brexit talks later in the week.
Euro (EUR) Subdued as Q3 GDP Revised Lower
The Euro (EUR) trended narrowly on Wednesday in the wake of a softer-than-expected Eurozone GDP reading, which saw third quarter growth revised down from 12.6% to 12.5%.
Helping prevent any losses on the back of the disappointing GDP figures was the latest ZEW survey which reported economic sentiment in Germany improved this month amid the coronavirus vaccine optimism.
Meanwhile, the Euro looks to be off to a positive start this morning despite the publication of some lacklustre German trade figures.
US Dollar (USD) Firms in Downbeat Trade
The US Dollar (USD) made moderate gains through yesterday’s trading session, as demand for the safe-haven currency was underpinned by a fall in equity markets.
However, these gains were tempered by the release of the NFIB Business Optimism Index, which reported that US business morale unexpectedly deteriorated in November.
Looking ahead, USD investors will look to this afternoon’s JOLTs job opening figures for fresh impetus, with a drop in openings potentially reinforcing concerns over the state of the US labour markets.
Canadian Dollar (CAD) Subdued as Oil Prices Remain Depressed
The Canadian Dollar (CAD) was left mostly rangebound on Tuesday, as the oil-sensitive ‘Loonie’ struggled to find support as WTI crude prices ticked lower.
Coming up, CAD investors will be focused on the latest Bank of Canada (BoC) rate decision later this afternoon. No policy changes are expected but how will the bank’s outlook for 2021 influence the Canadian Dollar?
Australian Dollar (AUD) Firms on Upbeat Consumer Sentiment
The Australian Dollar (AUD) trended higher overnight on Tuesday, supported by Australia’s latest consumer sentiment index after household confidence jumped to a decade high in December.
New Zealand Dollar (NZD) Buoyed by Improving Sentiment
The New Zealand Dollar (NZD) also ticked upwards in overnight trade, as the appeal of the risk-sensitive ‘Kiwi’ was buoyed by a modest improvement in market risk appetite.