Australian Dollar Nosedives as New Covid Variant Spooks Markets

Pound (GBP) Slips as Brexit Fears Worry GBP Investors 

The Pound (GBP) lost ground against many of its rivals yesterday as concerns over the Northern Ireland protocol deadlock continued to weigh on the currency

On Wednesday, Boris Johnson once again warned that the UK would trigger Article 16 if the current negotiations collapsed, and this weighed on Sterling into Thursday’s session. 

In the absence of high-impact UK data today, Brexit news may cause most movement in the Pound. 

Euro (EUR) Undermined by Rising Covid Cases 

The Euro (EUR) initially firmed yesterday, perhaps boosted by a slight change in tone from some European Central Bank (ECB) officials, as recent comments show increasing concern about upside inflation risks. 

The single currency relinquished some of its gains in the afternoon, however, amid surging Covid cases and new lockdown measures in a handful Eurozone countries. 

Looking ahead to today’s session, the Euro has shot higher this morning with no clear catalyst for the movement. EUR investors will likely look to speeches from ECB policymakers for fresh impetus later today. 

US Dollar (USD) Firms amid Risk-Off Mood 

The US Dollar (USD) edged higher against many of its peers yesterday, despite thin trading conditions due to the US Thanksgiving holiday, as Covid news rattled markets, thereby supporting the safe-haven currency. 

USD was also boosted by Wednesday’s hawkish Federal Open Market Committee (FOMC) meeting minutes, with some policymakers arguing for a faster pace of tapering. 

Today, the ‘Greenback’ is climbing once again. A new Covid variant has worried global investors, causing a sharp sell-off in equity markets. 

Canadian Dollar (CAD) Muted as Oil Prices Stay Flat 

The Canadian Dollar (CAD) had a mixed session yesterday, as crude prices remain subdued at $10 lower than the multi-year highs hit earlier this month. 

The Canadian government’s budget balance this afternoon may cause some movement in CAD exchange rates. Otherwise, crude prices could remain the driving factor. 

Australian Dollar (AUD) Tumbles on Covid Variant Fears 

The Australian Dollar (AUD) plummeted overnight as fears about a new Covid variant saw Asia-Pacific markets slump. 

New Zealand Dollar (NZD) Falls as Covid Concerns Sap Risk Appetite 

The New Zealand Dollar (NZD) also fell in overnight trade, although less sharply than the ‘Aussie’, as the anxious market mood sapped demand for the risk-sensitive ‘Kiwi’. 

Samuel Birnie

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