Pound US Dollar Exchange Rate Rebounds as Market Mood Improves

Pound (GBP) Firms despite Brexit Concerns 

The Pound (GBP) initially stumbled on Monday, falling in response to comments from Health Secretary Matt Hancock, in which he suggested the government is ‘open’ to delaying the next stage of lockdown easing

Sterling was then able to rebound in the second half of the session, although there didn’t appear to be any clear catalyst for this recovery, and it came in spite of souring relations between the UK and EU ahead of talks regarding the Northern Ireland protocol later this week. 

In the absence of any notable data releases, movement in the Pound today is likely to remain dominated by domestic coronavirus developments. 

Euro (EUR) Knocked by Disappointing German Data 

The Euro (EUR) edged lower during the first half of yesterday’s session, after German factory orders printed below expectations in April. 

However, the single currency was ultimately able to claw back these losses and close the session higher amidst an improving market mood which dragged the US Dollar (USD) lower. 

In the spotlight today will be the publication of Germany’s latest ZEW economic sentiment index, in which another improvement in morale could help the Euro to recoup some of its losses later this morning. 

US Dollar (USD) Buoyed by Yellen Comments 

The US Dollar (USD) ticked higher at the start of this week’s session, after USD investors seized on comments made by Treasury Secretary Janet Yellen over the weekend, in which she expressed support for higher interest rates. 

However, these gains faded by the start of the US trading session as a bullish market mood prompted investors to shy away from the safe-haven currency. 

Coming up, analysts are forecasting that April’s JOLTs job openings figures will beat March’s record high later this afternoon, but will this be enough to revive demand for the US Dollar? 

Canadian Dollar (CAD) Muted as WTI Crude Unable to Break $70 Barrier 

The Canadian Dollar (CAD) traded in a narrow range on Monday, with the oil-sensitive currency struggling to attract support after WTI crude prices began to dip, after falling just short of $70 a barrel. 

Australian Dollar (AUD) Slips as Business Sentiment Weakens 

The Australian Dollar (AUD) was placed on the defensive in overnight trade, with a weaker-than-expected domestic business sentiment reading as well as the ongoing coronavirus lockdown in Victoria, dampening the appeal of the ‘Aussie’. 

New Zealand Dollar (NZD) Dented by US-China Tensions 

The New Zealand Dollar (NZD) ticked lower overnight on Monday as market risk appetite was dented by fresh US-China tensions, as well as growing concerns over rising global inflationary pressures. 

Matthew Andrews

Contact Matthew Andrews