Pound (GBP) Undermined by Coronavirus Fears
The Pound (GBP) trended lower during yesterday’s session, amidst growing concern that the spread of the Delta variant of the coronavirus could force the government to delay its 21 June reopening plans.
Exerting additional pressure on Sterling sentiment were rising tensions between the UK and EU over the Northern Ireland protocol, with the EU threatening to take action against the UK if it does not abide by its ‘international law obligations’.
The UK and EU will hold a crunch meeting regarding the protocol later today, with the Pound vulnerable to losses if the dispute continues to escalate.
But in the meantime, some hawkish tapering comments by Bank of England (BOE) Chief Economist Andy Haldane could lend some support to Sterling.
Euro (EUR) Supported by Upgraded GDP Release
The Euro (EUR) edged higher on Tuesday, following the release of the latest Eurozone GDP estimate as growth in the bloc was revised higher in the first quarter of 2021.
However, these gains were tempered somewhat as Germany’s latest industrial production figures and ZEW economic sentiment index both printed below expectations.
Looking ahead, any movement in the Euro may prove limited today as EUR investors brace for the European Central Bank’s (ECB) rate decision on Thursday.
US Dollar (USD) Buoyed by Bearish Trade
The US Dollar (USD) traded with modest gains yesterday, with the currency appreciating amidst slight souring of market sentiment.
Reinforcing the uptrend in the ‘Greenback’ were the latest JOLTs job opening figures, which printed at a new record high in April, while pointing to some considerable slack in the US job market.
Meanwhile, with the focus now turning to Thursday’s consumer price index, USD investors may refrain from making any aggressive bets today.
Canadian Dollar (CAD) Muted as Oil Prices Dip
The Canadian Dollar (CAD) traded in a narrow range on Tuesday, with the commodity-linked currency struggling for direction amidst a modest drop in oil prices.
The ‘Loonie’ could rally later today however, if the Bank of Canada (BoC) should strike a hawkish tone as it concludes its latest policy meeting.
Australian Dollar (AUD) Dented by Weakening Consumer Confidence
The Australian Dollar (AUD) ticked lower overnight on Tuesday as Westpac’s latest consumer confidence index reported than household sentiment in Australia fell to a five-month low in June.
New Zealand Dollar (NZD) Undermined by Fall in Business Morale
The New Zealand Dollar (NZD) also trended lower in overnight trade, in response to an unexpected fall in domestic business confidence in June.