pound receeding

Pound Gains on Border Reopening and Brexit Hopes

Pound News: Sterling Avoids Losses amid Lingering Brexit Hopes

Hopes that the UK and EU could reach a Brexit deal this week continue to support the Pound today.

The Pound also recovered some of its early-week losses as market panic over the new coronavirus strain has subsided after France lifted the blockade on the cross channel border.

UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen will hold a call over the coming day. If there are any optimistic developments on a deal in the coming sessions, the Pound could strengthen further.

Euro News: Euro Steadies as USD Rebound Softens

While the Pound is rebounding today, the US Dollar is falling on a lack of safe-haven demand, leaving the Euro mixed amid cautiously optimistic market sentiment.

The Euro continues to be driven primarily by movement in rival currencies while Eurozone data continues to show resilience and the bloc’s outlook seems fairly optimistic.

Not much Eurozone data is expected over the coming week with markets closed for the festive holiday season. This will leave the Euro reacting largely to Brexit and coronavirus developments, and Pound and US Dollar movement.

US Dollar News: Calming Safe-Haven Demand and US Fiscal Uncertainty Limit USD Gains

The US Dollar had been rebounding for much of the week, as coronavirus and Brexit panic left markets looking for safe havens. However, the US Dollar’s appeal has softened today and the currency is slipping.

Concerns the US fiscal stimulus package could be blocked are keeping investors from moving much on the US Dollar today.

After today’s US PCE inflation showed household spending fell for the first time in seven months, and durable goods and initial jobless claims modestly bettered forecasts, the ‘Greenback’ has stayed under pressure as USD investors await news on the fiscal stimulus deal passing Congress.

Canadian Dollar News: GBP/CAD Sustains Recovery as Oil Weighs on ‘Loonie’

The trade-correlated Canadian Dollar is one of this week’s weaker major currencies. Prices of oil, Canada’s biggest export, have been falling on coronavirus and US fiscal stimulus uncertainties, which is keeping the Canadian Dollar weak as well.

Canadian building permits data is due tomorrow. However, Canadian Dollar movement is more likely to be influenced by shifts in market sentiment and oil prices.

Australian Dollar News: Relatively Risky ‘Aussie’ Remains Unappealing

Investors have been more averse to risk-taking this week, amid news of a new coronavirus strain in Britain, as well as complications over US fiscal stimulus. This is keeping the relatively risk and trade-correlated Australian Dollar weak.

Shifts in risk sentiment will remain the main driver for Australian Dollar movement in the coming sessions.

Upcoming Data

Thursday, 24th December

13:30    Canadian Building Permits

15:00    US 4-Week and 8-Week Bill Auctions