Pound (GBP) Muted amidst Rise in Domestic Coronavirus Cases
The Pound (GBP) traded sideways through yesterday’s trading session, as a rise in domestic coronavirus cases cast some doubts over the UK’s growth prospects.
This offset the publication of the Confederation of British Industry’s (CBI) latest distributive trades index, which reported UK retail sales volumes struck a six-year high in August.
Looking ahead, in the absence of any notable GBP data releases, the direction of the Pound may continue to be dictated by domestic coronavirus developments. Potentially leaving Sterling vulnerable to losses if new cases continue to climb.
Euro (EUR) Buoyed by Revised German GDP Release
The Euro (EUR) traded with modest gains on Tuesday, buoyed by the latest German GDP figures as growth was revised slightly higher in the second quarter.
This upside in the single currency was reinforced by its strong negative correlation with the US Dollar (USD) as the latter remained on the defensive yesterday.
Turning to this morning, the focus for EUR investors will be on Germany’s latest IFO business climate index, in which another drop in business morale could exert some pressure on the single currency.
US Dollar (USD) Losses Tempered by Rising Treasury Yields
The US Dollar (USD) remained on the defensive yesterday, China’s supressing of its latest wave of coronavirus infections and the full approval of the Pfizer vaccine in the US fed into a prevailing risk-on mood.
While this sapped demand for the safe-haven US Dollar, the currency’s losses were tempered amidst a modest uptick in US Treasury yields.
In the spotlight today will be the publication of the latest US durable goods release. Will an expected contraction in order growth last month weigh on USD exchange rates this afternoon?
Canadian Dollar (CAD) Strengthens as Oil Prices Continue to Climb
The Canadian Dollar (CAD) extended its upside on Tuesday, with the commodity-linked currency continuing to attract support as WTI crude climbed over 1% to $66 a barrel.
Australian Dollar (AUD) Dips as Market Sentiment Begins to Weaken
After rallying during yesterday’s European trading session, the Australian Dollar (AUD) began to weaken overnight on Tuesday amidst dwindling market risk appetite.
New Zealand Dollar (NZD) Slumps on Downbeat Trade Data
The New Zealand Dollar (NZD) also fell back in overnight trade, after New Zealand reported a shock trade deficit in July.