pound receeding

Global Coronavirus Situation Continues Worsening, Weighing on Market Sentiment

Pound News: Sterling Lacks Drive as Coronavirus Fears Persist

The Pound was mixed today as souring market sentiment and the UK’s alarmingly high coronavirus rate drove GBP movement.

Prevailing risk-off trade gave Sterling support against more risk-sensitive currencies, such as the Australian and New Zealand Dollars, but weakened against a stronger US Dollar.

While most of this week’s economic calendar is quiet, speeches from Bank of England (BoE) officials will be closely watched. The Pound could fall if any BoE officials hint that negative interest rates are possible.

Euro News: Recovering USD Limits EUR Appeal

Euro gains were limited today due to the single currency’s negative correlation with its biggest rival, the US Dollar, which is strengthening.

The Eurozone calendar is quiet until Wednesday, leaving the Euro to be driven by strength in rivals like the Pound and US Dollar, market sentiment, and Europe’s coronavirus developments.

US Dollar News: USD Rebound Pushes GBP/USD near January Low

Demand for the US Dollar jumped this morning. Investors bought the US Dollar in reaction to risk-off trade and rising US Treasury yields, which received support from the expectation that more fiscal stimulus is on the way for the US economy as the Biden administration takes over.

Analysts predict the US Dollar could keep climbing, especially if the Federal Reserve remains dovish. Meanwhile, tomorrow will see the publication of US job opening data that will likely influence USD movement as well.

Canadian Dollar News: Oil Prices Tumble on Fresh Coronavirus Jitters

The Pound to Canadian Dollar exchange rate edged higher today as the Canadian Dollar weakened due to a fall in prices of oil, Canada’s biggest export.

Oil prices were hit by a combination of coronavirus lockdown concerns, as well as a rebounding US Dollar.

This week will be quiet for Canadian data, with the Canadian Dollar’s movement likely driven more by oil prices and US Dollar movement this week.

Australian Dollar News: ‘Aussie’ Slides despite Strong Retail Sales

The Australian Dollar slipped today in spite of stronger-than-expected Australian retail sales for November that came in at 7.1%, better than the 7% forecast and a significant increase on October’s 1.4% rise.

Instead, the risk-sensitive Australian Dollar suffered due to a loss of market risk appetite as global coronavirus cases continue surging and another lockdown came into force in Hubei, China.

The Australian Dollar will continue to be driven by shifts in risk sentiment in the coming sessions, with upcoming Australian data having limited influence in comparison.

Upcoming Data

Tuesday, 12th January

10:00    BoE Policymaker Broadbent Speech

11:00    US NFIB Business Optimism

15:00    US JOLTs Job Openings

15:00    US IBD/TIPP Economic Optimism