Pound (GBP) Soars amid Brexit Talks and Rate Hike Rumours
The Pound (GBP) surged through Friday’s session, boosted by optimism as UK and EU representatives met to negotiate a resolution to the Northern Ireland protocol dispute.
Sterling was also supported by the likelihood of a Bank of England (BoE) rate hike this year, with traders pricing in a 72.4% chance of the bank raising rates at its December meeting.
Meanwhile, some hawkish comments from BoE governor Andrew Bailey on Sunday may help to underpin the Pound through today’s session.
Euro (EUR) Dented by Dovish ECB
The Euro (EUR) fell against most of its rivals on Friday following dovish comments from European Central Bank (ECB) policymaker Pierre Wunsch who reiterated the bank’s view that current inflationary pressures are temporary.
Wunsch’s comments echoed those of ECB President Christine Lagarde, who said on Thursday that it was ‘crucial that policy support was not withdrawn prematurely’.
With a notable lack of Eurozone data today, the single currency could be open to losses.
US Dollar (USD) Mixed on Positive Data
The US Dollar (USD) was mixed on Friday as an unexpected rise in US retail sales may have buoyed the ‘Greenback’ somewhat, despite contributing to an upbeat market mood.
This risk-positive sentiment put a lid on the safe-haven ‘Greenback’ and kept it in a narrow range, even pressuring it to the downside against some of its stronger peers.
The latest industrial production figures from the US could cause some movement today, particularly if they surprise investors.
Canadian Dollar (CAD) Dips on Concerns of Slowing Recovery
The Canadian Dollar (CAD) fell on Friday, despite rising oil prices, after warnings from the Bank of Canada (BoC) Governor Tiff Macklem that rising prices could slow Canada’s economic recovery.
Turning to today, Canada’s business outlook survey is expected to hit a fresh record high this afternoon, which may buoy the ‘Loonie’.
Australian Dollar (AUD) Softens amid Chinese Economic Slowdown
The Australian Dollar (AUD) ticked lower in overnight trade as a slowdown in China’s economic growth soured the market mood, thereby denting the appeal of the risk-sensitive ‘Aussie’.
New Zealand Dollar (NZD) Loses CPI Gains in Cautious Trade
The New Zealand Dollar (NZD) spiked at the start of the overnight session as New Zealand’s inflation rate for the third quarter printed above expectations.
However, the riskier ‘Kiwi’ then lost its gains due to the bearish turn in global markets.