Pound (GBP) Weakens despite Reopening Optimism
The Pound (GBP) dipped against most of its major rivals yesterday, despite a relatively optimistic address from health secretary Sajid Javid.
Last night Javid told MPs that ‘we see no reason to go beyond July 19’ for lifting the remaining restrictions, and that the restrictions ‘must come to an end.’ This generally positive news was potentially offset by rising cases of the Delta variant in the UK, leading to multiple countries banning non-vaccinated UK travellers.
In the absence of any notable data releases, coronavirus and Brexit developments are likely to have a big impact on GBP exchange rates. Will the EU formally grant the UK a further three-month grace period to remove checks on the Irish Sea border?
Euro (EUR) Strengthens on Upbeat Outlook
The Euro (EUR) firmed against many of its peers during yesterday’s session amid a generally upbeat outlook on the Eurozone’s economic recovery.
Without any influential data releases yesterday, the modest upside in the Euro was supported by hopes around the Euro area’s strengthening economy and advancing vaccination programme.
Today the Euro could climb further, as economic sentiment in the Eurozone is expected to rise to its highest level since March 2000. The single currency could also be boosted by Germany’s inflation rate, which is forecast to jump again by 2.3%.
US Dollar (USD) Firms on Cautious Trade
The US Dollar (USD) trended higher through yesterday’s trade as a prevailing risk-off market mood increased demand for the safe-haven currency.
The modest gains came despite the US 10-year Treasury yield dipping to 1.47%, down from the Friday’s highs of 1.54%.
In today’s session, market sentiment and bond yields could be the main drivers of USD movement through the morning. The Conference Board’s US Consumer Confidence Index may also influence the US Dollar later in the day, with the expected uptick in consumer confidence potentially supporting the ‘Greenback’.
Canadian Dollar (CAD) Slips on Falling Oil Prices
The Canadian Dollar (CAD) lost ground against most of its counterparts yesterday, with the oil-linked ‘Loonie’ dragged down by a dip in oil prices as WTI crude dropped by $1.
Looking to today, will crude prices recover and boost the Canadian Dollar?
Australian Dollar (AUD) Down amid Risk-Off Sentiment
The Australian Dollar (AUD) ticked lower in overnight trade, as a risk-off market mood dampened demand for the risk-sensitive ‘Aussie’.
New Zealand Dollar (NZD) Slips on Bearish Market Mood
The New Zealand Dollar (NZD) also declined overnight, with the current bearish market sentiment sapping the currency’s appeal.