Pound Picks Up as Northern Ireland Negotiations Resume

Pound (GBP) Buoyed by Brexit Optimism 

The Pound (GBP) firmed against most of its rivals on Friday, underpinned by renewed Brexit optimism over the Northern Ireland protocol. 

GBP investors were hopeful as negotiations resumed, with European Commission Vice-President Maroš Šefčovič saying he welcomed the ‘change in tone’ from the UK. 

With no UK data out today, domestic headlines could exert the most influence over GBP exchange rates. 

Euro (EUR) Slips as Industrial Production Falls Again 

The Euro (EUR) struggled through Friday’s session after Eurozone industrial production contracted for a second consecutive month in September, printing at -0.2%. 

Political tensions between the EU and Russia-backed Belarus also weighed on EUR exchange rates. Belarusian President Alexander Lukashenko threatened to halt gas supplies to Europe in response to planned EU sanctions, increasing anxiety surrounding the continent’s gas price crisis. 

This morning, EUR investors will be looking to the Eurozone’s balance of trade figures for fresh impetus. Will a weak reading dent the single currency? 

US Dollar (USD) Eases off Highs as Risk Appetite Improves 

The US Dollar (USD) retreated from the week’s highs on Friday amid some profit-taking and a risk-on market mood. 

US data in the afternoon added to the downside, as the University of Michigan’s consumer sentiment index unexpectedly dropped. 

In the absence of any market-moving US data today, risk appetite could be the main driver of movement in the safe-haven US Dollar. 

Canadian Dollar (CAD) Subdued with Crude at One-Week Low 

The commodity-linked Canadian Dollar (CAD) was muted during Friday’s trade as oil prices wavered around a one-week low. 

If oil prices continue the downward trend seen in recent days, the Canadian Dollar may struggle today. 

Australian Dollar (AUD) Gains in Upbeat Trade 

The Australian Dollar (AUD) edged higher in overnight trade as the perceived riskier ‘Aussie’ enjoyed a slight improvement in market mood. 

New Zealand Dollar (NZD) Undermined by Disappointing PMI 

The New Zealand Dollar (NZD) also firmed amid the risk-on sentiment, although an unexpected drop in New Zealand’s October services PMI capped the ‘Kiwi’. 

Samuel Birnie

Contact Samuel Birnie