Pound to Euro Buoyed by Vaccine Approval, GBP/USD Struggles
GBP exchange rates struck higher at the end of last week’s session, with the Pound to Euro exchange rate making solid gains.
Sterling’s gains came as GBP investors welcomed the announcement that the UK had approved another coronavirus vaccine for use.
However, these gains were capped somewhat after a ‘major incident’ was declared in London due to a worrying surge in coronavirus infections in the capital.
Looking ahead to this week, it’s safe to assume that UK coronavirus developments will continue to remain the key concern for GBP investors, with the Pound potentially facing an uphill battle if cases continue to rise at an alarming pace.
As market sentiment sours today, the Pound is experiencing mixed trading. The Pound to Euro exchange rate is holding just below €1.11 while the Pound to US Dollar is slipping as USD recovers some of last week’s losses.
Euro (EUR) Undermined by Coronavirus Concerns
The Euro (EUR) ticked lower against the majority of its peers on Friday, as the single currency was dented by concerns over rising coronavirus cases in Europe and the slow rollout of vaccines in many countries in the EU.
This overshadowed the Eurozone’s latest jobs figures, which reported a surprise fall in the bloc’s unemployment rate in November.
Coming up this week, the focus for EUR investors will be on Germany’s budget for 2021 as they look to the Eurozone’s largest economy to support the bloc’s economic recovery through massive fiscal spending.
US Dollar (USD) Fluctuates as US Payrolls Plunge
The US Dollar (USD) tumbled at the end of last week’s session after US payrolls shocked markets with a print of –140,000 in December, plunging from an expansion of 336,000 the previous month.
However, with the sudden collapse in US job growth failing to unnerve markets, the slump in the ‘Greenback’ proved fleeting amidst robust safe-haven demand.
Turning to this week’s session, the most notable USD data release will be the US consumer price index, where a weak inflation reading could put more pressure on the Federal Reserve to take action.
Canadian Dollar (CAD) Muted Following Weak Jobs Report
The Canadian Dollar (CAD) traded narrowly on Friday, after a larger-than-expected slump in employment growth dragged on CAD exchanges, offsetting another strong uptick in oil prices which may have otherwise bolstered the commodity-sensitive ‘Loonie’.
Australian Dollar (AUD) Weakens in Risk-Off Trade
The Australian Dollar (AUD) fell sharply in early trade this week, accelerating the losses seen on Friday as cautious trade sentiment sees investors shy away from the risk-sensitive ‘Aussie’.
New Zealand Dollar (NZD) Retreats amid Souring Market Mood
The New Zealand Dollar (NZD) also got off to a poor start this week as the high-yield ‘Kiwi’ also fell victim to jittery trade conditions.