Pound Steady on Coronavirus Optimism
The Pound (GBP) edged higher on Monday, with the currency offered support by Boris Johnson’s optimism regarding the UK’s coronavirus situation as he suggested the UK is seeing some signs of infection rates flattening.
Aiding Sterling’s advance yesterday was the publication of the UK’s latest PMI figures after January’s finalised manufacturing PMI was revised higher.
Looking ahead, the Pound may remain well positioned against most of its peers today as the currency continues to enjoy support from the UK’s success with its vaccine rollout.
Euro Knocked by Dire German Data
The Euro (EUR) stumbled out of the gates this week in response to some abysmal German retail sales figures.
Sales growth in the Eurozone’s largest economy collapsed to a record low in December as Germany’s lockdown tightened, with EUR investors fearing this trend is likely to remain firmly in place at the start of 2021 after Chancellor Angela Merkel extended the restrictions until at least mid-February.
Centre stage today we have the Eurozone’s latest GDP figures. EUR investors are bracing for a slump in growth in the last quarter of 2020 as Europe was rocked by a second wave of coronavirus cases.
However, there may be some scope for the Euro to rally this morning if Germany’s better-than-expected Q4 growth figures are reflected in today’s data.
US Dollar Firms in Risk-Off Trade
The US Dollar (USD) rallied through yesterday’s session as softening market sentiment saw investors favour the safe-haven ‘Greenback’.
There were a multitude of reasons for the deterioration in market sentiment, but it appeared mostly driven by reports that Republicans are pushing for Joe Biden to scale down his US stimulus package, as well as the ongoing uncertainty surrounding the current frenzied retail trade on the stock market, which appeared to have spread to silver on Monday.
Turning to today’s session we may see the US Dollar maintain its bullish momentum as the cautious mood looks to remain firmly in place.
Canadian Dollar Slips Despite Uptick in Oil Prices
The Canadian Dollar (CAD) ticked lower on Monday, with the commodity-linked ‘Loonie’ failing to garner support in spite of WTI crude prices rising at the start of the week.
Australian Dollar Slumps on Dovish RBA
The Australian Dollar (AUD) struck lower overnight on Monday as the Reserve Bank of Australia (RBA) caught investors by surprise in announcing a dovish expansion to its quantitative easing programme.
New Zealand Dollar Steadies as Risk Sentiment Sees Slight Improvement
The New Zealand Dollar (NZD) found some stable footing overnight, with the risk-sensitive ‘Kiwi’ able to avoid any additional losses following a modest improvement in the market mood.
Coming up later tonight, the publication of New Zealand’s latest labour figures could put some pressure on the ‘Kiwi’, amidst forecasts unemployment rose during the fourth quarter.