Published: 12 Jan at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, Germany,
The Pound (GBP) rose today after the Bank of England (BoE) Governor, Andrew Bailey, quelled speculation of negative interest rates by saying there would be â€˜a lot of issues with itâ€™.
Andrew Bailey commented:
â€˜In simple economics and maths terms, there is nothing to stop it at all. However, there are a lot of issues with it.â€™
Meanwhile, today saw the release of the latest BRC retail sales report, which revealed that 2020 had been the worst for the sector in 25-years.
However, GBP investors are more hopeful that the Covid-19 vaccine rollout could improve the chances of an economic recovery process taking place before spring.
The Euro (EUR) has remained subdued throughout the first two days of this week owing to growing concerns that the lag in Europeâ€™s Covid-19 vaccine programme could delay the blocâ€™s economic recovery.
Added to this, the German economy â€“ which is the largest in the Eurozone â€“ is expected to grow by 3.5%, undershooting the German Governmentâ€™s previous predictions.
As a result, single currency investors are becoming increasingly jittery as the outlook for the Eurozoneâ€™s economy continue to deteriorate.
US Dollar (USD)
The US Dollar (USD) has continued to benefit from safe-haven demand for the â€˜Greenbackâ€™, with fears that growing Covid-19 cases could threaten the global economyâ€™s recovery in spring.
Today also saw the release of the latest US business confidence data for December, which fell below forecasts to 95.9.
NFIB Chief Economist Bill Dunkelberg commented:
â€˜Small businesses are concerned about potential new economic policy in the new administration and the increased spread of COVID-19 that is causing renewed government-mandated business closures across the nation.â€™
Consequently, demand for the safe-haven USD remains as the outlook for the global economy still remains largely uncertain.
Canadian Dollar (CAD)
The Canadian Dollar (CAD) suffered by an unexpected slump in oil prices on Monday.
Oil prices fell by 1%, limiting demand for the commodity-linked â€˜Loonieâ€™.
Australian Dollar (AUD)
The Australian Dollar (AUD) has steadily recovered over the course of this week as risk-sentiment continues to improve.
As a result, demand for the risk-sensitive â€˜Aussieâ€™ is heading higher new that various countries increase their Covid-19 rollouts.
The risk sensitive New Zealand Dollar (NZD) has also benefited from improving risks sentiment.
Added to this, New Zealandâ€™s success with dealing with Covid-19 has benefited the â€˜Kiwiâ€™.
As of Tuesday, 12th January 2021, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1196, GBP USD exchange rate was 1.3668, GBP AUD exchange rate was 1.758, GBP NZD exchange rate was 1.8909, and GBP CAD exchange rate was 1.737.