Pound (GBP) Tumbles on Boris Johnson’s Pessimistic Comments
The Pound (GBP) plummeted at the end of last week’s session as the rising odds of a no-deal Brexit took a heavy toll on Sterling sentiment ahead of what was billed as the final weekend of talks.
These losses were hastened by comments from Prime Minister Boris Johnson, who suggested that it is ‘looking very, very likely’ that the UK faces a no-deal Brexit.
Brexit will continue dominating GBP exchange rates this week after the UK and EU agreed to go the ‘extra mile’ and extend trade talks. This decision has helped the Pound mount an impressive recovery this morning.
Euro (EUR) Undermined by ECB Comments on Exchange Rate
The Euro (EUR) experienced some modest selling pressure on Friday following comments from European Central Bank (ECB) policymaker Francois Villeroy de Galhau.
This saw Villeroy comment on the Euro’s recent appreciation, suggesting that the ECB is ‘vigilant’ about the exchange rate and that ‘instruments are available’ if it feels that it needs to act.
Turning to this week’s session the focus for EUR investors will be on the Eurozone’s latest PMI figures, with December’s preliminary releases likely to drag on the single currency amid forecasts that economic activity in the bloc continued to decline.
US Dollar (USD) Strengthens amid Stimulus Setbacks
The US Dollar (USD) pushed higher at the end of last week’s session as setbacks to another US stimulus package fed into a risk-off tone, bolstering the appeal of the safe-have ‘Greenback’.
Further bolstering the US Dollar was the University of Michigan’s preliminary consumer sentiment index, which reported US household confidence jumped in December.
In the spotlight for USD investors this week will be the Federal Reserve’s final policy meeting of 2020.
While the Fed is not expected to make any policy changes this month, USD investors will be keeping an eye out for the bank’s forward guidance for 2021.
Canadian Dollar (CAD) Subdued as Oil Prices Slip
The Canadian Dollar (CAD) recorded modest losses on Friday, with the appeal of the commodity-linked ‘Loonie’ dampened after oil prices retreated from their recent highs.
Australian Dollar (AUD) Jumps in Risk-On Trade
The Australian Dollar (AUD) opened this week on strong footing as a prevailing upbeat market mood in light of fresh Brexit and coronavirus vaccine optimism helped propel the risk-sensitive ‘Aussie’ higher.
New Zealand Dollar (NZD) Rally Capped by Lacklustre Data
The New Zealand Dollar (NZD) also trended higher through Monday’s Asian session, but the ‘Kiwi’s gains were tempered somewhat by a disappointing domestic business PMI.