Pound Strengthens as UK Vaccine Industry Gets a Boost

Pound (GBP) Gains as Vaccine-Making Investment Announced 

The Pound (GBP) caught some bids yesterday amid positive investment news for the UK’s biopharmaceutical industry. 

UK vaccine factory in Stockton-on-Tees received a £400m boost from its Japanese owner, Fujifilm Diosynth. Meanwhile, the UK government announced £5.5bn of investment in Covid research and vaccine manufacturing. 

The UK’s service PMI could cause some movement this morning. Will the final results differ from the preliminary score? 

Euro (EUR) Loses Jobless Rate Gains on USD Strength 

The Euro (EUR) initially firmed yesterday as the Eurozone unemployment rate fell for the sixth consecutive month, dropping 0.1 percentage point to 7.3% – its lowest level since April 2020. 

However, a stronger US Dollar (USD) weighed on the Euro in the afternoon due to the negative correlation between EUR and USD. As a result, the single currency lost its gains. 

Looking ahead, the Eurozone’s finalised services PMI and latest retail sales figures are out this morning. Economists expect sales to have recovered slightly in October, which may bolster EUR. 

US Dollar (USD) Mixed ahead of Non-Farm Payrolls 

The US Dollar had a mixed day yesterday, with USD investors seemingly awaiting the high-impact non-farm payrolls data today. 

The ‘Greenback’ did find some support in the afternoon following positive jobless claims data and hawkish comments from Federal Reserve officials. 

Out of the handful of US data releases today, the non-farm payrolls report is the most important. Another recovery in the US labour market will strengthen the case for the Fed to speed up its tapering plans. 

Canadian Dollar (CAD) Yo-yos as Markets React to OPEC+ Decision 

The Canadian Dollar (CAD) dipped and then recovered yesterday, in line with crude prices, as markets reacted to the OPEC+ oil output decision

The oil cartel chose to go ahead with planned production hikes, signalling that they expect demand to stay strong. However, they also left the meeting open so that they can quickly change policy if they see the need. 

Turning to today, analysts expect Canada’s latest employment data to be positive. This could boost CAD. 

Australian Dollar (AUD) Slips on US-China Tensions 

The Australian Dollar (AUD) fell overnight, despite a positive Australian services PMI, amid poor Chinese data and US-China tensions

New Zealand Dollar (NZD) Falls amid Risk-Off Mood 

The New Zealand Dollar (NZD) also lost ground in overnight trade as US-China worries and Omicron fears darkened markets, thereby denting the risk-sensitive ‘Kiwi’. 

Samuel Birnie

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