Pound Muted as Schools in England to Remain Closed through February
The Pound (GBP) opened yesterday’s session on a strong footing, amidst reports Boris Johnson plans to publish a document detailing the criteria for easing restrictions in England, potentially clearing up some of the uncertainty surrounding the lockdown.
However, Sterling subsequently relinquished most of these gains after Johnson announced that England’s schools will remain closed until at least March, dousing hopes of the lockdown being eased next month.
In the absence of any notable GBP data releases, movement in the Pound is likely to continue to be driven by coronavirus developments and UK vaccine statistics.
Euro US Dollar Exchange Rate Tumbles on ECB Rate Cut Rumours
EUR exchange rates fell back on Wednesday, coming under pressure following a report from Bloomberg that officials at the European Central Bank (ECB) believe that markets are underestimating the odds of the bank cutting interest rates.
Further weighing on the single currency was the publication of Germany’s latest consumer confidence index, as household sentiment going into February plunged to an eight-month low.
Coming up, the spotlight today will be on Germany’s consumer price index.
January’s preliminary CPI release is forecast to show that after four consecutive months of deflationary pressure, inflation finally began to pick up again, potentially offering some support to the Euro later this afternoon.
US Dollar Firms in Downbeat Trade
The US Dollar (USD) strengthened through yesterday’s session as investors flocked to the safe-haven currency amidst a souring of market sentiment.
This was reinforced by weaker-than-expected durable goods orders as well as the Federal Reserve’s latest policy meeting, in which the Fed expressed concerns about inflation and affirmed its commitment to support the US economy.
Turning to today’s session the focus for USD investors will be on last week’s initial jobless claims, where another elevated reading could further dent the market mood and bolster the US Dollar.
Canadian Dollar Extends Slide on Soft Oil Prices
The Canadian Dollar (CAD) continued to trend lower on Wednesday as modest losses in WTI crude prices dampened the appeal of the oil-sensitive ‘Loonie’.
Australian Dollar Slumps in Risk-Off Trade
The Australian Dollar (AUD) struck lower again overnight on Wednesday, with investors shying away from the risk-sensitive ‘Aussie’ as they grow increasingly cautious amidst coronavirus concerns and uncertainty over recent movement in the stock market.
New Zealand Dollar Undermined by Gloomy Mood
The New Zealand Dollar (NZD) also retreated in overnight trade, with the prevailing risk-off mood weighing heavily on the high-yield ‘Kiwi’.