GBP Fluctuates amid Recovery Hopes, Pound US Dollar Slips below $1.39
The Pound initially opened this week on a strong footing as Sterling sentiment was lifted by hopes that the UK’s economic recovery this year could be stronger than first thought.
Early in Monday’s session the Pound Euro exchange rate recovered slightly from Friday’s sharp drop, while GBP/USD moved back above $1.39.
However, the Pound subsequently gave up a large portion of these gains through the second half of the European session amidst a souring of market sentiment.
In the absence of any notable UK data releases, we may see GBP exchange rates remain volatile today, particularly as investors eye domestic coronavirus and political developments.
Euro Tumbles as German Business Confidence Disappoints
EUR exchange rates fell back on Monday, with the Euro US Dollar exchange rate retreating from $1.21, and a two-month high.
The single currency came under pressure due to the strength of the US Dollar and a disappointing IFO business index from Germany.
April’s business climate index only rose from 96.6 to 96.8, well below economists’ forecasts of 97.8, as business morale was weighed down by shortages of computer chips and other key components.
Meanwhile, with Eurozone data releases thin on the ground today, EUR investors may look to European coronavirus statistics for fresh impetus today. Will the continued acceleration of the EU’s vaccine rollout help to bolster the Euro?
US Dollar Buoyed by Souring Market Mood
The US Dollar struck higher during yesterday’s trading session, with demand for the safe-haven currency rising as market sentiment soured.
This was partly brought about by the publication of the latest US durable goods figures, which reported a weaker-than-expected rebound in goods orders last month.
Looking ahead, any movement in the US Dollar is likely to be limited today as USD investors brace for the Federal Reserve’s upcoming rate decision.
Canadian Dollar Bolstered by Vaccine Optimism
The Canadian Dollar rallied on Monday, with CAD bulls shrugging off a fall in oil prices as data showed that the rate of daily vaccinations being administered in Canada has more than doubled since the start of April.
AUD Buoyed by Rising Commodity Prices
The Australian Dollar ticked higher overnight on Monday as a bump in metal prices and improving market sentiment helped to bolster the appeal of the ‘Aussie’.
Looking ahead, AUD exchange rates could extend these gains later tonight as Australia’s consumer price index is forecast to report domestic inflation accelerated sharply in the first quarter of 2021.
New Zealand Dollar Firms amid Upbeat Mood
The New Zealand Dollar also rallied in overnight trade with the uptick in market sentiment also reflecting well on the ‘Kiwi’.
02:30 AUD Inflation Rate (Q1)