Pound (GBP) Tumbles as UK Headed for a No-Deal
The Pound (GBP) plummeted against the majority of its peers yesterday as the failure of a crunch meeting between PM Boris Johnson and EU Chief Ursula von der Leyen to secure a breakthrough on Wednesday evening stoked no-deal Brexit fears.
Applying additional pressure to Sterling was the release of the UK’s latest monthly GDP figures, which revealed economic growth slowed significantly in October.
With Brexit uncertainty likely to grow ahead of what could be the last chance for the two sides to reach a deal this weekend, it’s safe to assume the GBP selling bias will remain firmly in place.
Euro (EUR) Firms as ECB Expands QE by €500bn
The Euro (EUR) pushed higher on Thursday, rallying in response to the European Central Bank’s (ECB) decision to expand its quantitative easing programme by €500bn.
Additionally, the single currency appeared to be bolstered by ECB President Christine Lagarde’s decision not to comment on the EUR exchange rate, following some speculation she may seek to talk down the Euro as its recent surge makes boosting inflation more difficult for the bank.
Turning to today’s session, Germany’s latest CPI figures confirmed that consumer prices in Europe’s largest economy fell to a near five-year low last month, something which could dent the Euro this morning.
US Dollar (USD) Slumps in Upbeat Trade
The US Dollar (USD) experienced a broad sell-off during yesterday’s trading session, with demand for the safe-haven currency undermined as the FDA approval of the Pfizer vaccine cheered markets.
Further denting the appeal of the ‘Greenback’ was last week’s jobless claims figures. A marked jump in new claims at the start of December raised further concerns over the state of the US jobs market.
Top of the agenda for USD investors today is the University of Michigan’s latest consumer sentiment index. Another dip in consumer morale this month could weigh on the US dollar.
Canadian Dollar (CAD) Rallies as Oil Prices Rise
The Canadian Dollar (CAD) strengthened on Thursday, with the commodity-linked ‘Loonie’ carried higher by a jump in oil prices, which propelled Brent Crude to over $50 a barrel for the first time since March.
Australian Dollar (AUD) Soars on Vaccine Optimism
The Australian Dollar (AUD) rallied overnight on Thursday, even striking a new two-year high against the US Dollar. The risk-sentiment currency was bolstered by the news that the US had approved the Pfizer coronavirus vaccine.
New Zealand Dollar (NZD) Bolstered by Risk-On Trade
The New Zealand Dollar (NZD) also trended higher overnight as the ‘Kiwi’ benefited from the improvement in market risk appetite.