Pound Tumbles as Coronavirus Fears Grow, EUR Strengthens, USD Muted

Pound Undermined by Coronavirus Fears

The Pound (GBP) was on the defensive yesterday as GBP investors grew increasingly unnerved by suggestions that any further reopening of the economy could need to be delayed as the Delta variant of the coronavirus continues to spread throughout the UK.

These losses were reinforced after the latest UK manufacturing PMI was revised slightly lower.

UK coronavirus developments will remain the primary focus for GBP investors today, with Sterling being vulnerable to any negative headlines.

Euro Firms on Upbeat Data

The Euro (EUR) ticked higher against many of its peers during Tuesday’s session in response to some stronger-than-expected Eurozone data releases.

EUR investors welcomed the publication of the Eurozone’s latest manufacturing PMI and inflation figures as they printed above expectations in May.

Meanwhile, the Euro could face some headwinds this morning after Germany’s latest retail sales figures reported a sharp contraction of sales growth in April.

US Dollar Muted in Bullish Trade

The US Dollar (USD) traded sideways during yesterday’s trading session as demand for the safe-haven currency was undermined amidst a bullish market mood.

This was partly brought about by the latest ISM manufacturing PMI after it reported a stronger-than-expected expansion of US factory growth in May.

Looking ahead, in the absence of any other notable data, USD investors are likely to look to a couple of speeches by Federal Reserve policymakers for fresh impetus today.

Canadian Dollar Soars as Surging Oil Prices Offset Underwhelming GDP Figures

The Canadian Dollar (CAD) roared higher on Tuesday as demand for the commodity-linked ‘Loonie’ was turbocharged by a sharp jump in oil prices.

This offset the publication of Canada’s first quarter GDP figures, which reported Canada’s economy got off to a slower-than-expected start this year.

Australian Dollar Slumps as Victoria Extends Lockdown

The Australian Dollar (AUD) retreated overnight on Tuesday, after it was announced that the State of Victoria would be extending its lockdown by another week amidst a rise in local coronavirus cases.

This offset Australia’s latest GDP figures, which reported a stronger-than-expected expansion of growth in the first quarter and may have otherwise have bolstered the ‘Aussie’.

New Zealand Dollar Dips as Market Sentiment Softens

The New Zealand Dollar (NZD) also trended lower in overnight trade, as the appeal of the risk-sensitive ‘Kiwi’ was dented by a slight souring of market sentiment and a pickup in demand for the US Dollar.

Data Releases

07:00 EUR German Retail Sales (Apr)

10:00 AUD RBA Debelle Speech

17:00 USD Fed Evans Speech

18:10 EUR ECB President Lagarde Speech

19:00 USD Fed Bostic Speech

00:00 AUD Services PMI

02:30 AUD Balance of Trade (Apr)