Pound (GBP) Climbs on Continued Optimism
The Pound (GBP) climbed yesterday, as GBP investors continued to shake off last week’s Covid concerns and the outlook for the UK economy remained bright.
Coronavirus cases went down for the sixth day in a row yesterday. While the impact of the 19 July reopening has yet to feed through into the data, Sterling still found support on this cautiously optimistic news.
Meanwhile, the leading economic forecaster EY Item Club has said that the UK economy is growing at its fastest pace in 80 years, adding to the economic optimism that has strengthened the Pound in recent days.
GBP investors will be looking to the Confederation of British Industry’s latest distributive trades survey for further evidence of a strong economy. While the figure is expected to drop to 21, this would still be among the best results since September 2018.
Euro (EUR) Subdued on Lacklustre German Data
The Euro (EUR) gained against the US Dollar (USD) yesterday but struggled against its other rivals after business optimism in Germany missed expectations.
Despite unexpectedly dropping, the German Ifo business climate indictor still remained at one of its highest levels since April 2019. This allowed EUR/USD to capitalise on a softening US Dollar, though the single currency was subdued against its other peers.
In the absence of any major market-moving data today, the Euro could be primarily influenced by its strong negative correlation to USD.
US Dollar (USD) Dented by Threefold Increase in Covid Cases
The US Dollar (USD) slipped through yesterday’s trade, as US Covid fears and an increased global appetite for risk weighed on the safe-haven currency.
Covid cases in the US have almost tripled in the last two weeks, with concerns that a reluctance to get vaccinated among some Americans is fuelling the surge in cases.
Today’s durable goods orders could give USD a boost, as they are forecast to rise again by 2.1% in June.
Canadian Dollar (CAD) Rangebound on Steady Oil Prices
The Canadian Dollar (CAD) traded in a narrow range yesterday as oil prices hovered at around $72 a barrel.
With data releases thin on the ground today, the commodity-linked ‘Loonie’ will likely be driven by oil prices.
Australian Dollar (AUD) Loses Gains as Market Sentiment Sours
The Australian Dollar (AUD) slipped overnight, shedding the gains it made in yesterday’s European session, as global appetite for risk faded.
New Zealand Dollar (NZD) Dips on Cautious Market Mood
Likewise, the New Zealand Dollar (NZD) relinquished its gains in overnight trade as the bearish market mood saw demand for the risk-sensitive ‘Kiwi’ wane.