After initially advancing yesterday morning as investors sought safe harbour in light of the recent missile test by North Korea, the Pound (GBP) fell back against the majority of its peers by the end of Tuesday’s session as investors got over their initial shock.
Meanwhile Sterling’s decline was also aided by comments from President of the European Commission Jean-Claude Juncker yesterday. He criticised the UK’s latest Brexit plans, suggesting that the papers published by the UK government were not ‘satisfactory’.
The Pound Euro (GBP EUR) exchange rate tumbled on Tuesday as Juncker and EU chief negotiator Michel Barnier both suggested that UK government needed to ‘start negotiating seriously’.
However the single currency began to relinquish some of its gains overnight as investors sought to profit from the pairing’s eight-year low.
Meanwhile EUR investors will be focused on the release of Germany’s latest inflation figures later this afternoon as they look for signs that Europe’s largest economy is still growing.
Sterling fell back from its best levels against the US Dollar (USD) on Tuesday as North Korean tensions began to recede by the afternoon.
US investors appeared to take the launch in their stride as an unusually restrained response from Donald Trump helped to cool tensions.
However the ‘Greenback’ may find itself slipping again later this afternoon as Trump reveals more details about his upcoming tax reforms, with many doubts lingering about his ability to push them through Congress after his repeated failure to implement changes to healthcare.
The Pound Canadian Dollar (GBP CAD) exchange rate remained volatile yesterday as Hurricane Harvey caused oil prices to fluctuate for much of the session. While the storm knocked out many production sites, the drop in demand for US crude from neighbouring refineries kept prices subdued.
Sterling tumbled to a new five-month low against the Australian Dollar (AUD) during the Asian session last night following the release of Australia’s latest construction spending figures that revealed that spending rocketed up by 9.3% in the second quarter, up from 0.9% at the start of the year.
New Zealand Dollar
After tumbling yesterday the Pound New Zealand Dollar (GBP NZD) exchange rate is trading in a narrow range this morning as growing Brexit concerns continue to weigh on Sterling.
This week the US Dollar was touching three-year highs when valued against a basket of major currencies. The greenback’s traditional role as one of the safe-haven currencies is helped by a domestic economy that is largely immune to the threats of the coronavirus.
Last update: 22 Feb, 2020
The strong start to the year for “risk-on” currencies is already a distant memory.
Posted: 3 Feb, 2020
The threat of a proxy war between the US and Iran in Iraq has pared back some of the recent gains of “risk-on” currencies.
Last update: 8 Jan, 2020