Pound Relinquishes Gains as Rally Ends and Brexit Woes Return

Pound (GBP) Falls as Rally Fades 

The Pound (GBP) suffered a sell-off yesterday as its rally lost momentum, with GBP investors perhaps reigning themselves in as they remember the Bank of England (BoE) debacle earlier this month. 

A lack of data left the Pound without much support, while Brexit worries may also have weighed on GBP rates as a new fishing dispute with Denmark broke out on Wednesday. 

Although UK retail sales beat expectations in October, Sterling is slipping today. GBP is under pressure as UK public sector borrowing exceeded forecasts last month, with inflation pushing up debt costs

Euro (EUR) Breaks Three-day Losing Streak 

The Euro (EUR) managed to climb up from its multi-month lows yesterday in what seemed to be a technical correction rather than any event-driven movement. 

Speeches from various European Central Bank (ECB) members gave the single currency a small respite to recover as policymakers refrained from any overly dovish comments, which could have dented EUR. 

Dovish comments from ECB President Christine Lagarde have put the Euro on the back foot this morning, however. And with little Eurozone data coming out today, the single currency could struggle. 

US Dollar (USD) Recovers on Manufacturing Data 

The safe-haven US Dollar (USD) fluctuated through yesterday’s session, initially dipping amid lower Treasury yields and a risk-on market mood. 

A strong result from the Philadelphia Fed manufacturing index helped the ‘Greenback’ recover in the afternoon. However, initial jobless claims printed higher than expected, limiting USD’s gains. 

A lack of data could see the US Dollar struggle for direction today, while investors will be eyeing Federal Reserve speeches later this afternoon. 

Canadian Dollar (CAD) Muted as US Calls for Oil Reserves to Be Released 

The Canadian Dollar (CAD) was subdued yesterday after the US called on its allies to release crude reserves, while China announced that it had already begun to tap oil stockpiles to cool the market. 

The potential downside was offset somewhat by a better-than-expected ADP employment change report, with the Canadian economy adding 65,800 jobs in October, beating forecasts of 40,000. 

The ‘Loonie’ could slide later today as economists expect Canadian retail sales to have contracted by 1.7% in September. 

Australian Dollar (AUD) Posts Modest Gains as Market Mood Improves 

The Australian Dollar (AUD) edged higher against many of its rivals overnight as a slight improvement in market mood supported the risk-sensitive ‘Aussie’. 

New Zealand Dollar (NZD) Undermined by Drop in Spending 

The New Zealand Dollar (NZD), however, ticked lower in overnight trade as credit card spending in New Zealand contracted for the third consecutive month. 

Samuel Birnie

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