Pound (GBP) Flat as EU Legal Action Offsets Vaccine Hopes
The Pound (GBP) was mostly rangebound through yesterday’s trading session despite reports Boris Johnson seeks to have every adult in the UK receive at least one vaccination by early June.
Instead, the upside in Sterling appeared limited by the news that the EU had launched legal action against the UK for making unilateral changes to the Northern Irish trade arrangement.
Meanwhile, the Pound opens today’s session on the back foot, with the currency having tumbled overnight after several European countries suspended the use of the Oxford-AstraZeneca coronavirus vaccine.
Euro (EUR) Dips as Merkel’s Party Faces Historic Defeats
The Euro (EUR) struggled to attract support on Monday, amidst some political uncertainty in Germany after Chancellor Angela Merkel’s CDU party suffered its worst ever results in regional elections in Baden-Württemberg and Rhineland-Palatinate over the weekend.
The defeats for the outgoing Chancellor’s party just six months before a general election raises more uncertainty over Germany’s political future and unnerved some EUR investors.
The focus will remain on Germany today as well, with the publication of the latest ZEW surveys. Will another improvement in economic sentiment in the Eurozone’s largest economy provide a lift to the Euro today?
US Dollar (USD) Underpinned by Rising Yields
The US Dollar (USD) opened this week’s session on the front foot, bolstered by rising US Treasury yields, which hovered neared a one-year high.
Further buoying the appeal of the US Dollar was the latest Empire State manufacturing index, with March’s figures pointing to New York enjoying its strongest growth in business activity since November 2018.
Turning to today’s session the spotlight looks to be on the latest US retail sales figures. After soaring in January, analysts are forecasting last month will have brought a slump in sales growth, which could cool demand for the US Dollar this afternoon.
Canadian Dollar (CAD) Dented as WTI Crude Slips Below $65
The Canadian Dollar (CAD) edged lower on Monday, with the oil-sensitive ‘Loonie’ being undermined as WTI crude prices slipped below $65 a barrel following a 1% slump in the commodity.
Australian Dollar (AUD) Slumps in Risk-Off Trade
The Australian Dollar (AUD) trended lower overnight on Monday, with investors shying away from the risk-sensitive ‘Aussie’ as the market mood was dented following the suspension of the AstraZeneca coronavirus vaccine in several European countries.
New Zealand Dollar (NZD) Struggles amid Gloomy Mood
The New Zealand Dollar (NZD) also retreated in overnight trade, with the ‘Kiwi’ also facing pressure as vaccine uncertainty sapped market sentiment.
Data Releases
10:00 EUR German ZEW Economic Sentiment (Mar)
12:30 USD Retail Sales (Feb)