Pound Euro Surges to One-Week High, EU Avoids Vaccine Export Ban

Pound (GBP) Bolstered by Vaccine Relief

The Pound (GBP) rallied through yesterday’s European session, with investors welcoming reports that EU leaders were reluctant to support new powers to block vaccine exports.

Sterling sentiment was bolstered by the reports amidst fears any restrictions from the EU could severely hamper the UK’s vaccination programme and potentially delay the reopening of the economy.

Meanwhile, the Pound may look to extend gains this morning after data revealed a robust rebound in UK retail sales growth last month.

Euro (EUR) Dented by USD Strength

The Euro (EUR) was mostly muted through yesterday’s trading session as the single currency was pressured by demand for the US Dollar (USD).

This pullback in the single currency was also a result of EUR investors bracing for the EU leader’s summit to tackle Europe’s vaccine supply problems, which failed to provide a clear solution on how the EU will accelerate its vaccine rollout.

Looking ahead, the Euro may look to stabilise this morning if the latest IFO survey shows that German business sentiment continued improving this month.

US Dollar (USD) Buoyed by Upbeat Data

The US Dollar (USD) ticked higher again on Thursday, strengthening in response to some positive US data releases.

USD investors welcomed a slight upward revision to the final US GDP reading for the last quarter of 2020 as well as a surprisingly sharp drop in new jobless claims, which fell to their lowest levels since the start of the pandemic.

Coming up, the US Dollar could be given another boost later this afternoon if the Federal Reserve’s favoured measure of inflation (the PCE price index) reports that inflationary pressure continued to build last month. 

Canadian Dollar (CAD) Slumps as Oil Prices Tumble

The Canadian Dollar (CAD) slumped on Thursday, with the oil-sensitive ‘Loonie’ slipping in tandem with crude prices as concerns over weak demand in 2021 offset concerns over a short disruption to supply due to the Suez Canal blockage.

Australian Dollar (AUD) Buoyed by Improving Market Mood

The Australian Dollar (AUD) made modest gains overnight on Thursday, with the ‘Aussie’ clawing back some of its recent losses as some profit taking around the US Dollar and improving risk-appetite reflected well on AUD exchange rates.

New Zealand Dollar (NZD) Recovery Hampered by Housing Reforms

The New Zealand Dollar (NZD) also mounted a recovery in overnight trade as the market mood started to improve, but found these gains tempered by lingering concerns over New Zealand’s new housing reforms.