Pound (GBP) Dips amid Market Correction
The Pound fell back yesterday, with the currency’s recent bullish run appearing to give way to some profit taking.
Further limiting the upside potential in Sterling were some comments by Bank of England (BoE) Deputy Governor Ben Broadbent, who warned the recent appreciation of GBP exchange rates will have ‘some depressive effect on UK inflation’.
However, the Pound remains well positioned to resume its rally through the second half of the week, amidst ongoing hopes that the UK’s vaccination success will pave the way to a strong economic rebound this year.
Euro (EUR) Steady as Upbeat German GDP Tempers EU Vaccine Woes
The Euro was mostly rangebound through Wednesday’s trading session after Germany’s latest GDP reading saw growth revised up from 0.1% to 0.3% in the last quarter of 2020.
This helped to offset ongoing concerns over the EU’s vaccination rollout, which continues to lag well behind the UK and US, and is stoking concerns over the Eurozone’s economic potential this year.
In the spotlight for EUR investors today will be the latest EU summit of leaders, in which the EU’s vaccination woes are likely to feature heavily. Will a realistic plan to speed up regulatory approval and production of coronavirus vaccines in the EU help to boost the Euro?
US Dollar (USD) Revived by Spike in US Treasury Yields
The US Dollar mounted a modest rally during mid-week trade, with a sharp jump in US Treasury yields helping to reverse the recent USD selling bias.
This spike in bond yields was underpinned by signs of progress on President Biden’s $1.9 trillion stimulus package, which is fuelling hopes for a strong US economic recovery this year.
Looking ahead, the publication of the latest US durable goods figures could provide some support for the US Dollar later this afternoon, so long as this is not offset by another worrying rise in jobless claims last week.
Canadian Dollar (CAD) Strengthened by Uptick in Oil Prices
The Canadian Dollar firmed on Wednesday, with the commodity-linked ‘Loonie’ being carried higher by an upswing in oil prices.
Australian Dollar (AUD) Rallies in Risk-On Trade
The Australian Dollar struck higher overnight on Wednesday as the appeal of the risk-sensitive ‘Aussie’ was improved by the increasingly bullish outlook for the global economy.
New Zealand Dollar (NZD) Bolstered amid Upbeat Mood
The New Zealand Dollar also struck higher in overnight trade, with the ‘Kiwi’ also benefiting from the improvement in market risk appetite.
Data Releases
07:00 EUR German Consumer Confidence (Mar)
10:00 EUR Consumer Confidence (Feb)
10:00 EUR Economic Sentiment (Feb)
13:30 USD Durable Goods Orders (Jan)
13:30 USD GDP (Q4)
13:30 USD Initial Jobless Claims (20/Feb)
17:00 EUR EU Summit