- Sterling left behind as markets rally
- Euro holds onto gains
- Dollar softer as risk sentiment improves
- The pound was under pressure once more, as a combination of Brexit risks, negative interest rate talk and global concerns weighed heavy. Even though there markets rallied due to news of positive Covid-19 vaccine reports, the pound didn’t get to, and even with a small relief rally it continues to be the worst performing currency this month. The pound had hit a seven-week low against the euro on Monday at 89.60 pence, but strengthened to as much as 89.19 pence at around 0630 GMT. It weakened during the day before starting to strengthen around 1220 GMT and was last at 89.325, up around 0.2% since New York’s close.
- The euro held onto gains made on Tuesday as markets reacted well to the France-Germany proposal for a common fund in the EU has will move them closer to a fiscal union and mitigate any issues that the member states currently have. EURUSD current sits at 1.0956 from yesterdays high of 1.0975. This said, nothing has been finalise or agreed, so it is possible they could face opposition and as such markets will have to wait and see.
The dollar was softer on Tuesday as risk sentiment improved globally with reduction in Covid-19 related deaths as well as improved market conditions, one of which being the proposed fund mentioned above. The dollar, which draws safe-haven flows when risk appetite falls, has softened as investors took heart from encouraging early-stage data for a potential coronavirus vaccine. Furthermore, the greenback fell after U.S economic data showing homebuilding dropped by the most on record in April.
Other currency news
The yen slumped as global risk came off, losing out to the AUD and NZD overnight even though both countries had weaker than expected data. The Swiss France was lower also, losing out as markets moved into riskier assets and currencies.