Pound (GBP) Slips despite Positive Covid Data
The Pound (GBP) lost ground yesterday, despite the latest Covid data showing that infections continue to fall and hospitalisations may have plateaued.
The downside came amid a lack of UK economic data. Additionally, GBP investors felt cautious amid the political furore caused by the ‘partygate’ scandal and ongoing Brexit tensions.
Sterling could gain ground today following some strong employment data. Both the claimant count change and unemployment rate printed better than expected.
Euro (EUR) Subdued amid Lack of Data
The Euro (EUR) softened against many of its peers yesterday as a lack of data left the single currency open to losses.
In addition, a modest strength in the US Dollar (USD) put some pressure on the Euro due to the currencies’ negative correlation.
Germany’s ZEW economic sentiment index for January is due out later this morning. Although economists expect the score to edge higher, they also forecast a fourth consecutive drop in the current conditions indicator, which could dent the Euro.
US Dollar (USD) Edges Up despite Federal Holiday
The US Dollar showed some resilience yesterday, despite the fact that US markets were closed for Martin Luther King Jr Day.
Hawkish expectations from the Federal Reserve buoyed the ‘Greenback’. However, a risk-on market mood and thin trading conditions capped the upside.
A lack of market-moving US data today could mean the US Dollar will be driven by US Treasury bond yields, which have ticked higher in recent days.
Canadian Dollar (CAD) Gains as Business Sentiment Improves
The Canadian Dollar (CAD) firmed through yesterday’s session as the Bank of Canada’s (BoC) business outlook survey indicator hit a record high of 5.99.
With no notable Canadian data out in today’s session, crude prices could drive most movement in the oil-sensitive ‘Loonie’.
Australian Dollar (AUD) Falls on Record Covid Deaths
The Australian Dollar (AUD) slipped overnight as Australia recorded its deadliest day of the coronavirus pandemic so far.
New Zealand Dollar (NZD) Dips amid AUD Downside
The New Zealand Dollar (NZD) also stumbled in overnight trade, dragged down by its positive correlation to the ‘Aussie’ and a souring market mood.