Pound (GBP) Firms in Optimistic Trade
The Pound (GBP) opened this week’s session on some strong footing, with the currency recouping a good portion of the previous session’s losses amidst an improving market mood.
However, these gains were tempered by the release of some underwhelming UK PMI figures, which reported growth in the all-important service sector sank to a five-month low in August.
Looking ahead, in the absence of any notable economic releases, GBP investors could look to UK coronavirus developments for fresh impetus, potentially resulting in the Pound weakening if new cases continue to climb.
Euro (EUR) Undermined by German Growth Concerns
The Euro (EUR) traded on the back foot against all but the US Dollar (USD) yesterday, as the Eurozone’s latest PMI figures printed slightly below expectations.
This pullback in the Euro was reinforced in the wake a report from Germany’s Bundesbank, which suggest German economic growth could miss forecasts this year due to the Delta variant of the coronavirus.
Meanwhile, the publication of Germany’s latest GDP figures may help to boost the Euro this morning, after the finalised reading reported a slightly stronger-than-expected expansion of growth.
US Dollar (USD) Dips as Investors Scale Back Fed Tapering Expectations
The US Dollar (USD) got off to a weak start this week, as an improving market mood dented demand for the safe-haven currency.
This came amidst a dialing back of Federal Reserve tapering expectations ahead of this week’s Jackson Hole symposium, following the news that the event will now be held virtually in response to surging Delta variant cases in the US.
Looking ahead, the US dollar could face additional headwinds today, so long as the market mood continues to improve.
Canadian Dollar (CAD) Strengthens as Oil Prices Rally
The Canadian Dollar (CAD) trended higher on Monday, with the appeal of the commodity-linked ‘Loonie’ being bolstered by a 3% jump in oil prices, driven in part by a pullback in the US Dollar.
Australian Dollar (AUD) Firms amidst Improving Risk Appetite
The Australian Dollar (AUD) struck higher overnight on Monday, with the risk-sensitive ‘Aussie’ being underpinned by improving market sentiment and hopes that Australia’s vaccine rollout is starting to accelerate.
New Zealand Dollar (NZD) Bolstered by Positive Retail Sales Figures
The New Zealand Dollar (NZD) also strengthened in overnight trade, with the ‘Kiwi’ benefitting from a risk-on environment as well as data showing domestic retail sales continued to strengthen in the second quarter.
Looking ahead, the ‘Kiwi’ may strengthen again later tonight if New Zealand’s latest trade figures report the nation’s trade surplus expanded again last month.